Question 1

What is "transfer pricing?"

Accepted Answer

A) The cost to convert from one country's GAAP to another country's GAAP 
B) The value of sales made in a foreign country 
C) The prices established to record an intercompany sale 
D) The taxes paid on sales in a foreign country 
A) The cost to convert from one country's GAAP to another country's GAAP 
B) The value of sales made in a foreign country 
C) The prices established to record an intercompany sale 
D) The taxes paid on sales in a foreign country C

Question 2

When a foreign subsidiary pays dividends to its U.S.parent, this process is known as:

Accepted Answer

A) repatriation. 
B) the reverse authoritative principle. 
C) income-splitting. 
D) asset management. 
A) repatriation. 
B) the reverse authoritative principle. 
C) income-splitting. 
D) asset management. A

Question 3

As per U.S.corporate tax laws, which of the following statements is true of a company that is incorporated in the U.S.and has a branch in a foreign country?

Accepted Answer

A) The credit for the amount of taxes already paid is given to arrange for double taxation. 
B) The credit for the amount of taxes already paid is given to charge for the taxes not paid in the home country. 
C) The credit for the amount of taxes already paid is given to refund the taxes already paid in the home country. 
D) The credit for the amount of taxes already paid is given to give relief for the taxes paid in foreign country. 
A) The credit for the amount of taxes already paid is given to arrange for double taxation. 
B) The credit for the amount of taxes already paid is given to charge for the taxes not paid in the home country. 
C) The credit for the amount of taxes already paid is given to refund the taxes already paid in the home country. 
D) The credit for the amount of taxes already paid is given to give relief for the taxes paid in foreign country. D

Question 4

In which of the following levels can international accounting be defined?

Accepted Answer

A) Supranational organizations 
B) Company 
C) Country 
D) All of the above 
A) Supranational organizations 
B) Company 
C) Country 
D) All of the above

Question 5

Which of the following is an example of a "greenfield" investment?

Accepted Answer

A) Nike contracts with a footwear company in China to make athletic shoes. 
B) A Chinese oil company buys a U.S.oil company. 
C) Toyota, a Japanese automaker, builds an assembly plant in Ohio. 
D) Daimler, a German automaker, merges with Chrysler, a U.S.automaker. 
A) Nike contracts with a footwear company in China to make athletic shoes. 
B) A Chinese oil company buys a U.S.oil company. 
C) Toyota, a Japanese automaker, builds an assembly plant in Ohio. 
D) Daimler, a German automaker, merges with Chrysler, a U.S.automaker.

Question 6

In 2011, the most popular location for inbound foreign direct investment (FDI) among OECD countries was:

Accepted Answer

A) France. 
B) China. 
C) the United States. 
D) Australia. 
A) France. 
B) China. 
C) the United States. 
D) Australia.

Question 7

The following data relates to Alpha Inc.and Sigma Solutions: $\begin{array} { l r r } 
\text { Ratios } & \text { Alpha Inc. } & \text { Sigma Solutions } \
\text { Foreign Assets/Total Assets } & 57 & 63 \
\text { Foreign Sales/Total Sales } & 60 & 66 \
\text { Foreign Employment/Total Employment } & 63 & 60
\end{array}$ Which of the following statements is true of Alpha and Sigma?

Accepted Answer

A) Sigma Solutions is more multinational as its ratio of foreign sales to total sales is more than Alpha Inc. 
B) Alpha Inc.is more multinational as its ratio of foreign employment to total employment is more than Sigma Solutions. 
C) Sigma Solutions has a higher multinationality index than that of Alpha Inc. 
D) Alpha Inc.has a higher multinationality index than that of Sigma Solutions. 
A) Sigma Solutions is more multinational as its ratio of foreign sales to total sales is more than Alpha Inc. 
B) Alpha Inc.is more multinational as its ratio of foreign employment to total employment is more than Sigma Solutions. 
C) Sigma Solutions has a higher multinationality index than that of Alpha Inc. 
D) Alpha Inc.has a higher multinationality index than that of Sigma Solutions.

Question 8

What group is primarily responsible for the creation of International Financial Reporting Standards (IFRS)?

Accepted Answer

A) Financial Accounting Standards Board (FAS
B)  
B) International Forum on Accountancy Development (IFA
D)  
C) International Federation of Accountants (IF
A)  
D) International Accounting Standards Board (IAS
B)  
A) Financial Accounting Standards Board (FAS
B)  
B) International Forum on Accountancy Development (IFA
D)  
C) International Federation of Accountants (IF
A)  
D) International Accounting Standards Board (IAS
B)

Question 9

Which of the following statements is true about U.S.taxation of foreign subsidiaries?

Accepted Answer

A) The U.S.income taxes income generated by subsidiaries incorporated in foreign countries. 
B) U.S.multinationals do not pay tax on their worldwide income if incorporated in the U.S. 
C) Transfer pricing will eliminate taxes by the U.S.government on multinational corporations. 
D) U.S.tax on foreign operations does not have to be paid until the income is brought back to the U.S. 
A) The U.S.income taxes income generated by subsidiaries incorporated in foreign countries. 
B) U.S.multinationals do not pay tax on their worldwide income if incorporated in the U.S. 
C) Transfer pricing will eliminate taxes by the U.S.government on multinational corporations. 
D) U.S.tax on foreign operations does not have to be paid until the income is brought back to the U.S.

Question 10

What share of the world's gross domestic product (GDP) is generated by the 100 largest multinational companies?

Accepted Answer

A) 4% 
B) 12% 
C) 50% 
D) 75% 
A) 4% 
B) 12% 
C) 50% 
D) 75%

Question 11

For a U.S.multinational corporation, consolidating the financial statements of foreign subsidiaries requires two steps.First, the foreign subsidiary's statements must be restated according to the U.S.GAAP.The next step is to:

Accepted Answer

A) convert the account balances into U.S.dollars. 
B) determine the exchange rate gain or loss. 
C) calculate the translation adjustment. 
D) restate the income using international accounting standards. 
A) convert the account balances into U.S.dollars. 
B) determine the exchange rate gain or loss. 
C) calculate the translation adjustment. 
D) restate the income using international accounting standards.

Question 12

Which of the following is a reason for foreign direct investment?

Accepted Answer

A) To reduce costs of doing business 
B) To protect domestic markets 
C) To protect foreign markets 
D) All of the above 
A) To reduce costs of doing business 
B) To protect domestic markets 
C) To protect foreign markets 
D) All of the above

Question 13

Which of the following functional areas is included in the study of international accounting?

Accepted Answer

A) Financial accounting 
B) Accounting information systems 
C) Taxation 
D) All of the above 
A) Financial accounting 
B) Accounting information systems 
C) Taxation 
D) All of the above

Question 14

Many countries have recently liberalized their investment laws.What is the primary reason for these actions?

Accepted Answer

A) To make it more difficult for multinational companies to compete with domestic corporations 
B) To encourage foreign direct investment 
C) To enable funds to flow out of their country more easily 
D) To make taxing foreign companies easier 
A) To make it more difficult for multinational companies to compete with domestic corporations 
B) To encourage foreign direct investment 
C) To enable funds to flow out of their country more easily 
D) To make taxing foreign companies easier

Question 15

Belmonte Corporation, with a division located in Germany, must translate its financial statements from euros to U.S.dollars.What is the major accounting issue involved in translation?

Accepted Answer

A) Most accountants are not conversant in foreign currency exchange. 
B) U.S.GAAP may differ from German GAAP. 
C) The U.S.dollar has been steadily falling relative to the euro. 
D) The resulting balance sheet may not balance. 
A) Most accountants are not conversant in foreign currency exchange. 
B) U.S.GAAP may differ from German GAAP. 
C) The U.S.dollar has been steadily falling relative to the euro. 
D) The resulting balance sheet may not balance.

Question 16

The number of companies involved in international trade has grown significantly in recent years.What percent of U.S.exporters are relatively small companies (i.e.less than 500 employees)?

Accepted Answer

A) Less than 5% 
B) 10% 
C) 25% 
D) More than 90% 
A) Less than 5% 
B) 10% 
C) 25% 
D) More than 90%

Question 17

The ownership and control of foreign assets, such as a manufacturing plant, is called:

Accepted Answer

A) a hedge. 
B) foreign direct investment. 
C) an option. 
D) derivatives. 
A) a hedge. 
B) foreign direct investment. 
C) an option. 
D) derivatives.

Question 18

What countries are collectively known as "the triad"?

Accepted Answer

A) France, Spain, and Italy 
B) Germany, Russia, and China 
C) United States, Japan, and members of the European Union 
D) United States, Canada, and Mexico 
A) France, Spain, and Italy 
B) Germany, Russia, and China 
C) United States, Japan, and members of the European Union 
D) United States, Canada, and Mexico

Question 19

Which of the following statements is true about international transfer pricing?

Accepted Answer

A) It is a violation of the Foreign Corrupt Practices Act. 
B) It is accomplished using guidelines set up by the FASB. 
C) It can be used to minimize the amount of worldwide taxes. 
D) It cannot be regulated by countries. 
A) It is a violation of the Foreign Corrupt Practices Act. 
B) It is accomplished using guidelines set up by the FASB. 
C) It can be used to minimize the amount of worldwide taxes. 
D) It cannot be regulated by countries.

Question 20

How should we recognize the difference in the value of a receivable in a foreign currency at the time it was recorded and the time the cash was received?

Accepted Answer

A) As an adjustment to stockholders' equity 
B) As an adjustment to purchases 
C) As an extraordinary capital expenditure 
D) As a prior period adjustment 
A) As an adjustment to stockholders' equity 
B) As an adjustment to purchases 
C) As an extraordinary capital expenditure 
D) As a prior period adjustment

What is "transfer pricing?"

When a foreign subsidiary pays dividends to its U.S.parent, this process is known as:

As per U.S.corporate tax laws, which of the following statements is true of a company that is incorporated in the U.S.and has a branch in a foreign country?

In which of the following levels can international accounting be defined?

Which of the following is an example of a "greenfield" investment?

In 2011, the most popular location for inbound foreign direct investment (FDI) among OECD countries was:

The following data relates to Alpha Inc.and Sigma Solutions: Ratios Alpha Inc. Sigma Solutions Foreign Assets/Total Assets 57 63 Foreign Sales/Total Sales 60 66 Foreign Employment/Total Employment 63 60 Which of the following statements is true of Alpha and Sigma?

What group is primarily responsible for the creation of International Financial Reporting Standards (IFRS)?

Which of the following statements is true about U.S.taxation of foreign subsidiaries?

What share of the world's gross domestic product (GDP) is generated by the 100 largest multinational companies?

For a U.S.multinational corporation, consolidating the financial statements of foreign subsidiaries requires two steps.First, the foreign subsidiary's statements must be restated according to the U.S.GAAP.The next step is to:

Which of the following is a reason for foreign direct investment?

Which of the following functional areas is included in the study of international accounting?

Many countries have recently liberalized their investment laws.What is the primary reason for these actions?

Belmonte Corporation, with a division located in Germany, must translate its financial statements from euros to U.S.dollars.What is the major accounting issue involved in translation?

The number of companies involved in international trade has grown significantly in recent years.What percent of U.S.exporters are relatively small companies (i.e.less than 500 employees)?

The ownership and control of foreign assets, such as a manufacturing plant, is called:

What countries are collectively known as "the triad"?

Which of the following statements is true about international transfer pricing?

How should we recognize the difference in the value of a receivable in a foreign currency at the time it was recorded and the time the cash was received?

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters

Exam 1: Introduction to International Accounting

What is "transfer pricing?"

When a foreign subsidiary pays dividends to its U.S.parent, this process is known as:

As per U.S.corporate tax laws, which of the following statements is true of a company that is incorporated in the U.S.and has a branch in a foreign country?

In which of the following levels can international accounting be defined?

Which of the following is an example of a "greenfield" investment?

In 2011, the most popular location for inbound foreign direct investment (FDI) among OECD countries was:

The following data relates to Alpha Inc.and Sigma Solutions: Ratios Alpha Inc. Sigma Solutions Foreign Assets/Total Assets 57 63 Foreign Sales/Total Sales 60 66 Foreign Employment/Total Employment 63 60 Which of the following statements is true of Alpha and Sigma?

What group is primarily responsible for the creation of International Financial Reporting Standards (IFRS)?

Which of the following statements is true about U.S.taxation of foreign subsidiaries?

What share of the world's gross domestic product (GDP) is generated by the 100 largest multinational companies?

For a U.S.multinational corporation, consolidating the financial statements of foreign subsidiaries requires two steps.First, the foreign subsidiary's statements must be restated according to the U.S.GAAP.The next step is to:

Which of the following is a reason for foreign direct investment?

Which of the following functional areas is included in the study of international accounting?

Many countries have recently liberalized their investment laws.What is the primary reason for these actions?

Belmonte Corporation, with a division located in Germany, must translate its financial statements from euros to U.S.dollars.What is the major accounting issue involved in translation?

The number of companies involved in international trade has grown significantly in recent years.What percent of U.S.exporters are relatively small companies (i.e.less than 500 employees)?

The ownership and control of foreign assets, such as a manufacturing plant, is called:

What countries are collectively known as "the triad"?

Which of the following statements is true about international transfer pricing?

How should we recognize the difference in the value of a receivable in a foreign currency at the time it was recorded and the time the cash was received?

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters