Question 1

A tax haven is a country:

Accepted Answer

A)  where companies benefit from establishing fully operating subsidiaries. 
B)  that does not charge local companies for importing products from other countries. 
C)  that does not charge taxes on the purchase or sale of any items. 
D)  with an exceptionally low, or even no, income tax. 
A)  where companies benefit from establishing fully operating subsidiaries. 
B)  that does not charge local companies for importing products from other countries. 
C)  that does not charge taxes on the purchase or sale of any items. 
D)  with an exceptionally low, or even no, income tax.

Question 2

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a valid observation of the cost of capital?

Accepted Answer

A)  The cost of capital is typically higher in the global capital market. 
B)  Domestic capital markets have more liquidity than global markets. 
C)  Local debt financing raises the cost of capital if liquidity is limited. 
D)  A local sale of equity is preferred to global sale by international firms. 
A)  The cost of capital is typically higher in the global capital market. 
B)  Domestic capital markets have more liquidity than global markets. 
C)  Local debt financing raises the cost of capital if liquidity is limited. 
D)  A local sale of equity is preferred to global sale by international firms.

Question 4

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The _____ is the main instrument of financial control in an organization.

Accepted Answer

A)  chief financial officer 
B)  corporate accounting 
C)  audit 
D)  budget 
A)  chief financial officer 
B)  corporate accounting 
C)  audit 
D)  budget

Question 7

A _____ between two countries is an agreement specifying what items of income will be taxed by the authorities of the country where the income is earned.

Accepted Answer

A)  tax deferral agreement 
B)  fixed-rate treaty 
C)  tax treaty 
D)  free trade agreement 
A)  tax deferral agreement 
B)  fixed-rate treaty 
C)  tax treaty 
D)  free trade agreement

Question 8

Accounting standards are rules for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 9

The International Accounting Standards Board:

Accepted Answer

A)  can issue a new accounting standard if the majority of the board members agree. 
B)  was formed to replace the Financial Accounting Standards Board. 
C)  proposes standards but has no power to enforce the standards. 
D)  was formed to supervise the accounting practices that U.S. firms follow. 
A)  can issue a new accounting standard if the majority of the board members agree. 
B)  was formed to replace the Financial Accounting Standards Board. 
C)  proposes standards but has no power to enforce the standards. 
D)  was formed to supervise the accounting practices that U.S. firms follow.

Question 10

Explain the concept of transfer pricing.

Accepted Answer

Firms are continually shipping component

Question 11

Part of the benefit that a parent company receives by receiving payment through royalties can be lost if the subsidiary's:

Accepted Answer

A)  combined tax rate is higher than the parent's. 
B)  local government views royalties as an expense. 
C)  local tax rates on profits are extremely high. 
D)  managers are controlled directly by the parent. 
A)  combined tax rate is higher than the parent's. 
B)  local government views royalties as an expense. 
C)  local tax rates on profits are extremely high. 
D)  managers are controlled directly by the parent.

Question 12

_____ represent the remuneration paid to the owners for the use of technology or the right to manufacture and/or sell products under patents or trade names.

Accepted Answer

A)  Royalties 
B)  Transfer costs 
C)  Fees 
D)  Licensing costs 
A)  Royalties 
B)  Transfer costs 
C)  Fees 
D)  Licensing costs

Question 13

Payment of dividends is an uncommon method of transferring funds from foreign subsidiaries to the parent company.

Accepted Answer

A) True 
 B)False

Question 14

Firms cannot use transfer prices to move funds from a subsidiary to the parent company when financial transfers in the form of dividends are blocked by host-country government policies.

Accepted Answer

A) True 
 B)False

Question 15

Capital budgeting for a foreign project:

Accepted Answer

A)  begins with an audit of the current cash flows. 
B)  is vastly different from domestic capital budgeting. 
C)  begins with converting all cash flow to Eurocurrency. 
D)  uses the same theoretical framework that domestic capital budgeting uses. 
A)  begins with an audit of the current cash flows. 
B)  is vastly different from domestic capital budgeting. 
C)  begins with converting all cash flow to Eurocurrency. 
D)  uses the same theoretical framework that domestic capital budgeting uses.

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 where there were well-devel

Question 17

Compliance to IASB standards is:

Accepted Answer

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

Question 18

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

Accepted Answer

A) True 
 B)False

Question 19

The _____ writes the generally accepted accounting principles (GAAP) that govern the financial statements of U.S. firms.

Accepted Answer

A)  U.S. Securities and Exchange Commission 
B)  Office of Economic Analysis 
C)  International Accounting Standards Board 
D)  Financial Accounting Standards Board 
A)  U.S. Securities and Exchange Commission 
B)  Office of Economic Analysis 
C)  International Accounting Standards Board 
D)  Financial Accounting Standards Board

Question 20

A _____ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Accepted Answer

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

A tax haven is a country:

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

Which of the following is a valid observation of the cost of capital?

Accounting information is the means by which firms communicate their financial position to the providers of capital.

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

The _____ is the main instrument of financial control in an organization.

A _____ between two countries is an agreement specifying what items of income will be taxed by the authorities of the country where the income is earned.

Accounting standards are rules for preparing financial statements.

The International Accounting Standards Board:

Explain the concept of transfer pricing.

Part of the benefit that a parent company receives by receiving payment through royalties can be lost if the subsidiary's:

_____ represent the remuneration paid to the owners for the use of technology or the right to manufacture and/or sell products under patents or trade names.

Payment of dividends is an uncommon method of transferring funds from foreign subsidiaries to the parent company.

Firms cannot use transfer prices to move funds from a subsidiary to the parent company when financial transfers in the form of dividends are blocked by host-country government policies.

Capital budgeting for a foreign project:

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

Compliance to IASB standards is:

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

The _____ writes the generally accepted accounting principles (GAAP) that govern the financial statements of U.S. firms.

A _____ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Filters

Exam 20: Accounting and Finance in the International Business

A tax haven is a country:

The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

Which of the following is a valid observation of the cost of capital?

Accounting information is the means by which firms communicate their financial position to the providers of capital.

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

The _____ is the main instrument of financial control in an organization.

A _____ between two countries is an agreement specifying what items of income will be taxed by the authorities of the country where the income is earned.

Accounting standards are rules for preparing financial statements.

The International Accounting Standards Board:

Explain the concept of transfer pricing.

Part of the benefit that a parent company receives by receiving payment through royalties can be lost if the subsidiary's:

_____ represent the remuneration paid to the owners for the use of technology or the right to manufacture and/or sell products under patents or trade names.

Payment of dividends is an uncommon method of transferring funds from foreign subsidiaries to the parent company.

Firms cannot use transfer prices to move funds from a subsidiary to the parent company when financial transfers in the form of dividends are blocked by host-country government policies.

Capital budgeting for a foreign project:

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

Compliance to IASB standards is:

Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

The _____ writes the generally accepted accounting principles (GAAP) that govern the financial statements of U.S. firms.

A _____ represents the remuneration paid to the owners of technology, patents, or trade names for the use of that technology or the right to manufacture and/or sell products under those patents or trade names.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Filters