Question 1

Most banks charge ________ for moving cash from one location to another.

Accepted Answer

A)  a transfer fee 
B)  an internal forward rate 
C)  an accounting service fee 
D)  an audit fee 
A)  a transfer fee 
B)  an internal forward rate 
C)  an accounting service fee 
D)  an audit fee A

Question 2

Pooling the cash of all the subsidiaries centrally

Accepted Answer

A)  lowers the interest rate earned. 
B)  reduces the earning potential for firms. 
C)  increases the interest rate paid. 
D)  increases the earning potential for firms. 
A)  lowers the interest rate earned. 
B)  reduces the earning potential for firms. 
C)  increases the interest rate paid. 
D)  increases the earning potential for firms. D

Question 3

Critics of adjusting discount rates to reflect a location's riskiness argue that it

Accepted Answer

A)  does not penalize either distant or early cash flows enough. 
B)  penalizes distant cash flows too heavily. 
C)  does not penalize early cash flows enough. 
D)  penalizes early cash flows too heavily. 
A)  does not penalize either distant or early cash flows enough. 
B)  penalizes distant cash flows too heavily. 
C)  does not penalize early cash flows enough. 
D)  penalizes early cash flows too heavily. D

Question 4

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

Accepted Answer

A) True 
 B)False

Question 5

________ is a loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.

Accepted Answer

A)  A fronting loan 
B)  An equity loan 
C)  A direct loan 
D)  A security loan 
A)  A fronting loan 
B)  An equity loan 
C)  A direct loan 
D)  A security loan

Question 6

Compliance to IASB standards is

Accepted Answer

A)  mandatory for countries that want to engage in international trade. 
B)  enforced through the World Trade Organization. 
C)  voluntary. 
D)  enforced through the United Nations. 
A)  mandatory for countries that want to engage in international trade. 
B)  enforced through the World Trade Organization. 
C)  voluntary. 
D)  enforced through the United Nations.

Question 7

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses. Substantiate with a suitable example.

Accepted Answer

International businesses are confronted

Question 8

The standards of U.S. Financial Accounting Standards Board and IASB are vastly different.

Accepted Answer

A) True 
 B)False

Question 9

Evaluation of a subsidiary should be separate from the evaluation of its manager.

Accepted Answer

A) True 
 B)False

Question 10

Most subsidiaries of an international business operate in uniform environments.

Accepted Answer

A) True 
 B)False

Question 11

The IASB has the power to enforce its standards, so it has considerable power in the industry.

Accepted Answer

A) True 
 B)False

Question 12

The problem of blocked earnings is not as serious now as it once was because

Accepted Answer

A)  fixed exchange rates have become more common. 
B)  governmental intervention in earnings is more frequent. 
C)  there is greater acceptance of free market economics. 
D)  political risk within the economy is very low in modern times. 
A)  fixed exchange rates have become more common. 
B)  governmental intervention in earnings is more frequent. 
C)  there is greater acceptance of free market economics. 
D)  political risk within the economy is very low in modern times.

Question 13

The principles of multilateral netting and bilateral netting are different.

Accepted Answer

A) True 
 B)False

Question 14

In countries such as the United States and Britain, firms typically raised capital by

Accepted Answer

A)  obtaining funding from the government. 
B)  borrowing money from national banks. 
C)  issuing stock or bonds to investors. 
D)  borrowing money from international banks. 
A)  obtaining funding from the government. 
B)  borrowing money from national banks. 
C)  issuing stock or bonds to investors. 
D)  borrowing money from international banks.

Question 15

A fronting loan is a loan between a parent and its subsidiary channeled through a financial intermediary.

Accepted Answer

A) True 
 B)False

Question 16

How is a country's accounting system affected by the providers of capital? Explain with the help of suitable examples.

Accepted Answer

In countries with well-developed capital

Question 17

Briefly differentiate accounting standards and auditing standards.

Accepted Answer

Accounting standards are rules for prepa

Question 18

Multilateral netting is used primarily to

Accepted Answer

A)  reduce transaction costs between subsidiaries. 
B)  avail tax credit from governments. 
C)  establish a tax treaty among multiple countries. 
D)  reduce the fixed costs of establishing a subsidiary. 
A)  reduce transaction costs between subsidiaries. 
B)  avail tax credit from governments. 
C)  establish a tax treaty among multiple countries. 
D)  reduce the fixed costs of establishing a subsidiary.

Question 19

The price at which goods and services are transferred between subsidiary companies in a multinational firm is referred to as

Accepted Answer

A)  minimum retail price. 
B)  deferral price. 
C)  transfer price. 
D)  transaction price. 
A)  minimum retail price. 
B)  deferral price. 
C)  transfer price. 
D)  transaction price.

Question 20

A ________ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Accepted Answer

A)  fronting loan 
B)  fee 
C)  royalty 
D)  transfer price 
A)  fronting loan 
B)  fee 
C)  royalty 
D)  transfer price

Most banks charge ________ for moving cash from one location to another.

Pooling the cash of all the subsidiaries centrally

Critics of adjusting discount rates to reflect a location's riskiness argue that it

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

________ is a loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.

Compliance to IASB standards is

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses. Substantiate with a suitable example.

The standards of U.S. Financial Accounting Standards Board and IASB are vastly different.

Evaluation of a subsidiary should be separate from the evaluation of its manager.

Most subsidiaries of an international business operate in uniform environments.

The IASB has the power to enforce its standards, so it has considerable power in the industry.

The problem of blocked earnings is not as serious now as it once was because

The principles of multilateral netting and bilateral netting are different.

In countries such as the United States and Britain, firms typically raised capital by

A fronting loan is a loan between a parent and its subsidiary channeled through a financial intermediary.

How is a country's accounting system affected by the providers of capital? Explain with the help of suitable examples.

Briefly differentiate accounting standards and auditing standards.

Multilateral netting is used primarily to

The price at which goods and services are transferred between subsidiary companies in a multinational firm is referred to as

A ________ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Filters

Exam 20: Accounting and Finance in the International Business

Most banks charge ________ for moving cash from one location to another.

Pooling the cash of all the subsidiaries centrally

Critics of adjusting discount rates to reflect a location's riskiness argue that it

A firm's ability to establish a centralized depository that can serve short-term cash needs might be limited by government-imposed restrictions on capital flows across borders.

________ is a loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.

Compliance to IASB standards is

Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses. Substantiate with a suitable example.

The standards of U.S. Financial Accounting Standards Board and IASB are vastly different.

Evaluation of a subsidiary should be separate from the evaluation of its manager.

Most subsidiaries of an international business operate in uniform environments.

The IASB has the power to enforce its standards, so it has considerable power in the industry.

The problem of blocked earnings is not as serious now as it once was because

The principles of multilateral netting and bilateral netting are different.

In countries such as the United States and Britain, firms typically raised capital by

A fronting loan is a loan between a parent and its subsidiary channeled through a financial intermediary.

How is a country's accounting system affected by the providers of capital? Explain with the help of suitable examples.

Briefly differentiate accounting standards and auditing standards.

Multilateral netting is used primarily to

The price at which goods and services are transferred between subsidiary companies in a multinational firm is referred to as

A ________ is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Filters