Question 1

The Morgan Stanley Dean Witter "Apples to Apples" analysis relies on:

Accepted Answer

A) converting financial statements to U.S.GAAP to compare international investment opportunities. 
B) identifying the most significant factors affecting stock value and considering the effect of accounting diversity on these factors. 
C) the superiority of U.S.GAAP for determining the true value of international capital investments. 
D) converting all the accounts in foreign financial statements to a common set of accounting standards. 
A) converting financial statements to U.S.GAAP to compare international investment opportunities. 
B) identifying the most significant factors affecting stock value and considering the effect of accounting diversity on these factors. 
C) the superiority of U.S.GAAP for determining the true value of international capital investments. 
D) converting all the accounts in foreign financial statements to a common set of accounting standards.

Question 2

Which of the following is most likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

Accepted Answer

A) differences in currency 
B) language differences 
C) varying business traditions 
D) mathematical degrees of magnitude 
A) differences in currency 
B) language differences 
C) varying business traditions 
D) mathematical degrees of magnitude

Question 3

Lack of information about accounting methods used,operating segments,and interim financial results is a problem of:

Accepted Answer

A) disclosure. 
B) relevance. 
C) comparability. 
D) format. 
A) disclosure. 
B) relevance. 
C) comparability. 
D) format.

Question 4

What is EDGAR?

Accepted Answer

A) It is a database provided by the London,England stock exchange that provides financial statement information on U.K.companies. 
B) It is a database created by the U.S.Securities and Exchange Commission that provides reports of all corporations listed on the U.S.stock exchanges. 
C) It is a database of reports filed electronically with the U.S.Securities and Exchange Commission. 
D) It is a database that links users to U.S.company websites much like CAROL does in the U.K. 
A) It is a database provided by the London,England stock exchange that provides financial statement information on U.K.companies. 
B) It is a database created by the U.S.Securities and Exchange Commission that provides reports of all corporations listed on the U.S.stock exchanges. 
C) It is a database of reports filed electronically with the U.S.Securities and Exchange Commission. 
D) It is a database that links users to U.S.company websites much like CAROL does in the U.K.

Question 5

What is an advantage of using ratio analysis in comparing financial statements from different countries?

Accepted Answer

A) Ratios are expressed as percentages,making currency differences irrelevant to the analysis. 
B) Ratios highlight the holding gains or losses related to currency translation. 
C) Purchasing power gains and losses from currency translation show up clearly in ratio analysis. 
D) Comparing business ratios across countries removes the effect of economic conditions and business culture. 
A) Ratios are expressed as percentages,making currency differences irrelevant to the analysis. 
B) Ratios highlight the holding gains or losses related to currency translation. 
C) Purchasing power gains and losses from currency translation show up clearly in ratio analysis. 
D) Comparing business ratios across countries removes the effect of economic conditions and business culture.

Question 6

Evaluating liquidity and solvency to assess a company's ability to meet its obligations is an example of:

Accepted Answer

A) cash flow analysis 
B) risk analysis 
C) ROI analysis 
D) accounting analysis 
A) cash flow analysis 
B) risk analysis 
C) ROI analysis 
D) accounting analysis

Question 7

Which of the following statements is true about convenience translations of financial statements?

Accepted Answer

A) International Business Machines (IBM)is the only corporation in the U.S.that currently provides convenience translation of its financial statements into a foreign language. 
B) Few U.S.companies translate their financial statements into another language. 
C) Convenience translation means that a company will translate its financial statements into English. 
D) All of the above statements are true. 
A) International Business Machines (IBM)is the only corporation in the U.S.that currently provides convenience translation of its financial statements into a foreign language. 
B) Few U.S.companies translate their financial statements into another language. 
C) Convenience translation means that a company will translate its financial statements into English. 
D) All of the above statements are true.

Question 8

According to European Union directives,how frequently must its publicly traded corporations publish financial reports?

Accepted Answer

A) annually 
B) semi-annually 
C) quarterly 
D) monthly 
A) annually 
B) semi-annually 
C) quarterly 
D) monthly

Question 9

Which of the following statements is true relative to accounting for leases internationally?

Accepted Answer

A) Operating lease disclosure for IFRS and U.S.GAAP is identical. 
B) Some analysts believe that all leases must be restated as if they were operating leases. 
C) Current rules under IFRS,U.S.GAAP and other national accounting standards require leases to be capitalized under certain circumstances. 
D) U)S.GAAP requires that future minimum lease payment disclosures be made for each of the next ten years and for all years thereafter. 
A) Operating lease disclosure for IFRS and U.S.GAAP is identical. 
B) Some analysts believe that all leases must be restated as if they were operating leases. 
C) Current rules under IFRS,U.S.GAAP and other national accounting standards require leases to be capitalized under certain circumstances. 
D) U)S.GAAP requires that future minimum lease payment disclosures be made for each of the next ten years and for all years thereafter.

Question 10

On what SEC form must foreign corporations with shares listed on U.S.stock exchanges present a reconciliation of net income and stockholders' equity to U.S.GAAP?

Accepted Answer

A) Form 1040 
B) Form 10-K 
C) Form 20-F 
D) Form 8-Q 
A) Form 1040 
B) Form 10-K 
C) Form 20-F 
D) Form 8-Q

Question 11

Which of the following is the major limitation of using EBITDA for analyzing foreign financial statements?

Accepted Answer

A) It is nearly impossible for most financial analysts to calculate this number. 
B) Few analysts understand what this earnings number represents. 
C) The excluded items may be important factors for evaluation. 
D) It cannot be converted from a foreign currency to a domestic currency. 
A) It is nearly impossible for most financial analysts to calculate this number. 
B) Few analysts understand what this earnings number represents. 
C) The excluded items may be important factors for evaluation. 
D) It cannot be converted from a foreign currency to a domestic currency.

Question 12

Why should financial analysts endorse the adoption of IFRS worldwide?

Accepted Answer

A) It would eliminate differences in the financial statements of international companies. 
B) It would increase the comparability of financial statements across countries. 
C) It would increase the demand for the services of international financial analysts. 
D) The services of financial analysts would become more valuable to investors. 
A) It would eliminate differences in the financial statements of international companies. 
B) It would increase the comparability of financial statements across countries. 
C) It would increase the demand for the services of international financial analysts. 
D) The services of financial analysts would become more valuable to investors.

Question 13

Translating foreign financial statements into a convenience language:

Accepted Answer

A) eliminates all readability problems for a financial analyst. 
B) does not always clarify accounting terminology unique to a particular country. 
C) is easily and inexpensively done when the convenience language is English. 
D) is required for all multinational corporations. 
A) eliminates all readability problems for a financial analyst. 
B) does not always clarify accounting terminology unique to a particular country. 
C) is easily and inexpensively done when the convenience language is English. 
D) is required for all multinational corporations.

Question 14

Which of the following is true about the format of financial reports?

Accepted Answer

A) All multinational corporations report Sales Revenue on their income statements. 
B) Gross margin is a standard line item on income statements throughout the world. 
C) Notes to financial statements may clarify international differences in statement formats. 
D) In all countries,total assets are shown on the left side of the balance sheet and liabilities and owners' equity are shown on the right side. 
A) All multinational corporations report Sales Revenue on their income statements. 
B) Gross margin is a standard line item on income statements throughout the world. 
C) Notes to financial statements may clarify international differences in statement formats. 
D) In all countries,total assets are shown on the left side of the balance sheet and liabilities and owners' equity are shown on the right side.

Question 15

Footnote disclosures in foreign financial statements are particularly helpful in:

Accepted Answer

A) overcoming differences in statement format among countries. 
B) reconciling statements from one country's GAAP to another country's GAAP. 
C) learning relevant information not required to be presented in the accounts. 
D) all of the above 
A) overcoming differences in statement format among countries. 
B) reconciling statements from one country's GAAP to another country's GAAP. 
C) learning relevant information not required to be presented in the accounts. 
D) all of the above

Question 16

Which of the following statements is true about convenience translations?

Accepted Answer

A) Translation eliminates the problems associated with comparing financial statements in the same language. 
B) Convenience translation means that a company converts both the language and the currency of its financial statements for the convenience of potential investors. 
C) Convenience translations require reconciliation to U.S.GAAP,U.S.format,as well as conversion to English. 
D) None of the above statements is true. 
A) Translation eliminates the problems associated with comparing financial statements in the same language. 
B) Convenience translation means that a company converts both the language and the currency of its financial statements for the convenience of potential investors. 
C) Convenience translations require reconciliation to U.S.GAAP,U.S.format,as well as conversion to English. 
D) None of the above statements is true.

Question 17

Which of the following statements is NOT true concerning reasons for analyzing foreign financial statements?

Accepted Answer

A) It is important to determine the financial stability of foreign suppliers. 
B) The stock returns of foreign corporations are nearly perfectly correlated with returns on U.S.stocks. 
C) In a global economy,managers may use foreign competitors as benchmarks for evaluating performance. 
D) Managers should determine the financial health of foreign customers before extending credit. 
A) It is important to determine the financial stability of foreign suppliers. 
B) The stock returns of foreign corporations are nearly perfectly correlated with returns on U.S.stocks. 
C) In a global economy,managers may use foreign competitors as benchmarks for evaluating performance. 
D) Managers should determine the financial health of foreign customers before extending credit.

Question 18

How can foreign corporations alleviate the accounting diversity problem related to comparing foreign financial statements?

Accepted Answer

A) presenting multiple sets of financial statements under various GAAP 
B) selecting a widely used set of accounting standards for their financial reporting 
C) providing adequate disclosure in notes to the financial statements to allow analysts to make conversions to another country's GAAP 
D) all of the above 
A) presenting multiple sets of financial statements under various GAAP 
B) selecting a widely used set of accounting standards for their financial reporting 
C) providing adequate disclosure in notes to the financial statements to allow analysts to make conversions to another country's GAAP 
D) all of the above

Question 19

How should currency translation be done in order to appropriately compare a financial statement presented in Japanese yen to a financial statement presented in Chinese yuan?

Accepted Answer

A) The temporal method should be used. 
B) The historical exchange rates should be used convert financial statement amounts. 
C) All amounts should be converted at the current exchange rate. 
D) Current year statements should be converted at the current exchange rate and prior year statements should be converted at prior year exchange rate. 
A) The temporal method should be used. 
B) The historical exchange rates should be used convert financial statement amounts. 
C) All amounts should be converted at the current exchange rate. 
D) Current year statements should be converted at the current exchange rate and prior year statements should be converted at prior year exchange rate.

Question 20

British companies whose shares are publicly traded on exchanges in the United Kingdom have how long after year-end to file financial statements with regulators in the U.K.?

Accepted Answer

A) 6 months 
B) 90 days 
C) 60 days 
D) 30 days 
A) 6 months 
B) 90 days 
C) 60 days 
D) 30 days

The Morgan Stanley Dean Witter "Apples to Apples" analysis relies on:

Which of the following is most likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

Lack of information about accounting methods used,operating segments,and interim financial results is a problem of:

What is EDGAR?

What is an advantage of using ratio analysis in comparing financial statements from different countries?

Evaluating liquidity and solvency to assess a company's ability to meet its obligations is an example of:

Which of the following statements is true about convenience translations of financial statements?

According to European Union directives,how frequently must its publicly traded corporations publish financial reports?

Which of the following statements is true relative to accounting for leases internationally?

On what SEC form must foreign corporations with shares listed on U.S.stock exchanges present a reconciliation of net income and stockholders' equity to U.S.GAAP?

Which of the following is the major limitation of using EBITDA for analyzing foreign financial statements?

Why should financial analysts endorse the adoption of IFRS worldwide?

Translating foreign financial statements into a convenience language:

Which of the following is true about the format of financial reports?

Footnote disclosures in foreign financial statements are particularly helpful in:

Which of the following statements is true about convenience translations?

Which of the following statements is NOT true concerning reasons for analyzing foreign financial statements?

How can foreign corporations alleviate the accounting diversity problem related to comparing foreign financial statements?

How should currency translation be done in order to appropriately compare a financial statement presented in Japanese yen to a financial statement presented in Chinese yuan?

British companies whose shares are publicly traded on exchanges in the United Kingdom have how long after year-end to file financial statements with regulators in the U.K.?

Introduction to International Accounting

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

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters

Exam 10: Analysis of Foreign Financial Statements

The Morgan Stanley Dean Witter "Apples to Apples" analysis relies on:

Which of the following is most likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

Lack of information about accounting methods used,operating segments,and interim financial results is a problem of:

What is EDGAR?

What is an advantage of using ratio analysis in comparing financial statements from different countries?

Evaluating liquidity and solvency to assess a company's ability to meet its obligations is an example of:

Which of the following statements is true about convenience translations of financial statements?

According to European Union directives,how frequently must its publicly traded corporations publish financial reports?

Which of the following statements is true relative to accounting for leases internationally?

On what SEC form must foreign corporations with shares listed on U.S.stock exchanges present a reconciliation of net income and stockholders' equity to U.S.GAAP?

Which of the following is the major limitation of using EBITDA for analyzing foreign financial statements?

Why should financial analysts endorse the adoption of IFRS worldwide?

Translating foreign financial statements into a convenience language:

Which of the following is true about the format of financial reports?

Footnote disclosures in foreign financial statements are particularly helpful in:

Which of the following statements is true about convenience translations?

Which of the following statements is NOT true concerning reasons for analyzing foreign financial statements?

How can foreign corporations alleviate the accounting diversity problem related to comparing foreign financial statements?

How should currency translation be done in order to appropriately compare a financial statement presented in Japanese yen to a financial statement presented in Chinese yuan?

British companies whose shares are publicly traded on exchanges in the United Kingdom have how long after year-end to file financial statements with regulators in the U.K.?

Introduction to International Accounting

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

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters