Question 1

Which of the following is not an example of IFRS simplified for SMEs?

Accepted Answer

A)  All borrowing costs are expensed as incurred. 
B)  All development costs are expensed as incurred. 
C)  Goodwill is amortized over its useful life. 
D)  There is a choice between using the cost model and the revaluation model for property, plant, and equipment. 
E)  Actuarial gains and losses for defined benefit plans are recognized immediately. 
A)  All borrowing costs are expensed as incurred. 
B)  All development costs are expensed as incurred. 
C)  Goodwill is amortized over its useful life. 
D)  There is a choice between using the cost model and the revaluation model for property, plant, and equipment. 
E)  Actuarial gains and losses for defined benefit plans are recognized immediately.

Question 2

What problems are caused by diverse accounting practices?

Accepted Answer

(1) Difficulty in preparation of consoli

Question 3

Which of the following is a correct statement with regard to differences between IFRS and U.S.GAAP?

Accepted Answer

A)  Reporting a bank overdraft that is an integral part of a cash management policy is a recognition difference. 
B)  Reporting LIFO inventory is a presentation difference. 
C)  Reporting past service cost for defined benefit pension plans is a measurement difference. 
D)  Reporting convertible debt is a recognition difference. 
E)  Reporting development costs is a classification difference. 
A)  Reporting a bank overdraft that is an integral part of a cash management policy is a recognition difference. 
B)  Reporting LIFO inventory is a presentation difference. 
C)  Reporting past service cost for defined benefit pension plans is a measurement difference. 
D)  Reporting convertible debt is a recognition difference. 
E)  Reporting development costs is a classification difference.

Question 4

Which of the following is the organization that governs the IASB?

Accepted Answer

A)  IASC. 
B)  IOSCO. 
C)  UNESCO. 
D)  IFRS Foundation. 
E)  IAS Service. 
A)  IASC. 
B)  IOSCO. 
C)  UNESCO. 
D)  IFRS Foundation. 
E)  IAS Service.

Question 5

Which of the following is not one of the steps to prepare IFRS statements for the first time?

Accepted Answer

A)  Determine applicable IFRS accounting policies based on standards in force on the reporting date. 
B)  Recognize assets and liabilities required to be recognized under IFRS that were not recognized under previous GAAP. 
C)  Derecognize assets and liabilities previously recognized that are not allowed to be recognized under IFRS. 
D)  Reclassify items previously classified in a different manner from what is acceptable under IFRS. 
E)  Comply with most disclosure and presentation requirements. 
A)  Determine applicable IFRS accounting policies based on standards in force on the reporting date. 
B)  Recognize assets and liabilities required to be recognized under IFRS that were not recognized under previous GAAP. 
C)  Derecognize assets and liabilities previously recognized that are not allowed to be recognized under IFRS. 
D)  Reclassify items previously classified in a different manner from what is acceptable under IFRS. 
E)  Comply with most disclosure and presentation requirements.

Question 6

All of the following are influences on the development of a country's financial reporting practices except:

Accepted Answer

A)  The country's legal system. 
B)  The country's political system. 
C)  The taxation system. 
D)  The country's cultural system. 
E)  The country's level of inflation. 
A)  The country's legal system. 
B)  The country's political system. 
C)  The taxation system. 
D)  The country's cultural system. 
E)  The country's level of inflation.

Question 7

The types of differences that exist between IFRS and U.S.GAAP would not generally include:

Accepted Answer

A)  Presentation differences. 
B)  Measurement differences. 
C)  Disclosure differences. 
D)  Comparability differences. 
E)  Classification differences. 
A)  Presentation differences. 
B)  Measurement differences. 
C)  Disclosure differences. 
D)  Comparability differences. 
E)  Classification differences.

Question 8

Which of the following is a pronouncement originally issued by the IASC and is not a pronouncement originally issued by the IASB?

Accepted Answer

A)  Business Combinations. 
B)  First-Time Adoption of IFRS. 
C)  Financial Instruments: Disclosures. 
D)  Interim Financial Reporting. 
E)  Operating Segments. 
A)  Business Combinations. 
B)  First-Time Adoption of IFRS. 
C)  Financial Instruments: Disclosures. 
D)  Interim Financial Reporting. 
E)  Operating Segments.

Question 9

Dowa, Ltd.. is a foreign company that uses IFRS for its financial reporting. Dowa is a wholly-owned subsidiary of Ide Corp. which is a U.S. company that prepares its consolidated financial statements in accordance with U.S. GAAP. Dowa purchased a piece of equipment for 2,000,000 on January 1, 2017. The equipment is comprised of the following three significant components, shown with their associated cost and useful life.
   As a corporate policy, Ide Corp. utilizes the straight-line method of depreciation for machinery and equipment and plans to extend this policy to Dowa, Ltd.
-Prepare the journal entry to convert the 2017 Dowa, Ltd.financial statements from IFRS to U.S.GAAP.

Accepted Answer

The answer of Dowa, Ltd.. is a foreign company that...

Question 10

What are some examples of accounting treatments under IFRS for SMEs for recognizing and measuring assets, liabilities, income, and expenses?

Accepted Answer

Under IFRS for SMEs, (1) borrowing costs

Question 11

Convergence of accounting standards would not occur by:

Accepted Answer

A)  FASB adopting an existing IASB standard. 
B)  IASB adopting an existing FASB standard. 
C)  IASB issuing a new standard. 
D)  IASB and FASB jointly developing a new standard. 
E)  IASB and FASB each issuing a similar but not identical standard. 
A)  FASB adopting an existing IASB standard. 
B)  IASB adopting an existing FASB standard. 
C)  IASB issuing a new standard. 
D)  IASB and FASB jointly developing a new standard. 
E)  IASB and FASB each issuing a similar but not identical standard.

Question 12

Dowa, Ltd.. is a foreign company that uses IFRS for its financial reporting. Dowa is a wholly-owned subsidiary of Ide Corp. which is a U.S. company that prepares its consolidated financial statements in accordance with U.S. GAAP. Dowa purchased a piece of equipment for 2,000,000 on January 1, 2017. The equipment is comprised of the following three significant components, shown with their associated cost and useful life.
   As a corporate policy, Ide Corp. utilizes the straight-line method of depreciation for machinery and equipment and plans to extend this policy to Dowa, Ltd.
-Prepare the journal entry for the 2017 depreciation expense for Ide Corp.based on U.S.GAAP.

Accepted Answer

The answer of Dowa, Ltd.. is a foreign company that...

Question 13

On December 31, 2017, Carter Corp.a foreign subsidiary of Barter Corp., had a bank overdraft of $20,000 on one of its bank accounts.Bank overdrafts are an integral part of Carter's cash management policy.
1) Prepare the journal entry to convert the foreign subsidiary from its IFRS financial statements to U.S.GAAP financial statements.
2) Briefly explain why this journal entry is required.

Accepted Answer

(1)
 @#IMG-DLM& (2) Under IFRS, bank overdrafts ar

Question 14

When measuring assets and liabilities recognized on the opening balance sheet in accordance with first-time adoption of IFRS, the reporting company must:

Accepted Answer

A)  Use its current valuation method and disclose the method in the notes to the financial statements. 
B)  Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. 
C)  Prospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. 
D)  Recognize the difference in measurement, and disclose it in the notes to the financial statements as a change in accounting estimate. 
E)  Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet and recognize the amount of change in the income statement. 
A)  Use its current valuation method and disclose the method in the notes to the financial statements. 
B)  Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. 
C)  Prospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. 
D)  Recognize the difference in measurement, and disclose it in the notes to the financial statements as a change in accounting estimate. 
E)  Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet and recognize the amount of change in the income statement.

Question 15

Which of the following statements is false regarding a country's legal system?

Accepted Answer

A)  The two major types of legal systems are common law and codified Roman law. 
B)  Common law originated in the Roman jus civile. 
C)  Code law countries tend to have more statutes governing a wider range of human activity. 
D)  Accounting law is rather general in code law countries. 
E)  A nongovernmental organization is more likely to develop in a common law country than in a code law country. 
A)  The two major types of legal systems are common law and codified Roman law. 
B)  Common law originated in the Roman jus civile. 
C)  Code law countries tend to have more statutes governing a wider range of human activity. 
D)  Accounting law is rather general in code law countries. 
E)  A nongovernmental organization is more likely to develop in a common law country than in a code law country.

Question 16

Foreign companies whose stock is listed on a U.S.stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

Accepted Answer

A)  Form 8-A. 
B)  Form 10-A. 
C)  Form 16-K. 
D)  Form 20-F. 
E)  Form 20-K. 
A)  Form 8-A. 
B)  Form 10-A. 
C)  Form 16-K. 
D)  Form 20-F. 
E)  Form 20-K.

Question 17

What are the two primary methods used by countries to incorporate IFRS into their financial reporting requirements for listed companies?

Accepted Answer

(1) Full adoption of IFRS as i

Question 18

The FASB-IASB convergence project on leases resulted in the following:

Accepted Answer

A)  Lease accounting will be the same under IFRS and under U.S. GAAP in that lessors and lessees will capitalize all leases as finance leases and treat them as such in the measurement of income. 
B)  Lessor and lessee accounting will be the same under IFRS and under U.S. GAAP in that lessors will capitalize all leases and lessees will capitalize some leases as finance leases but treat others as operating leases. 
C)  Lease accounting will differ in that under IFRS lessees will capitalize some leases as finance leases and others as operating leases, while under U.S. GAAP lessees will capitalize all leases as finance leases but treat them as traditional operating leases in the measurement of net income. 
D)  Lease accounting will be similar under IFRS and U.S. GAAP for lessees but will differ for lessors in their treatment of the measurement of net income. 
E)  Lease accounting will differ for lessees in that, under IFRS, all leases will be treated as finance leases both on the balance sheet and in the measurement of net income, and under U.S. GAAP lessees will capitalize operating leases on the balance sheet similar to finance leases but will treat them as traditional operating leases in the measurement of income. 
A)  Lease accounting will be the same under IFRS and under U.S. GAAP in that lessors and lessees will capitalize all leases as finance leases and treat them as such in the measurement of income. 
B)  Lessor and lessee accounting will be the same under IFRS and under U.S. GAAP in that lessors will capitalize all leases and lessees will capitalize some leases as finance leases but treat others as operating leases. 
C)  Lease accounting will differ in that under IFRS lessees will capitalize some leases as finance leases and others as operating leases, while under U.S. GAAP lessees will capitalize all leases as finance leases but treat them as traditional operating leases in the measurement of net income. 
D)  Lease accounting will be similar under IFRS and U.S. GAAP for lessees but will differ for lessors in their treatment of the measurement of net income. 
E)  Lease accounting will differ for lessees in that, under IFRS, all leases will be treated as finance leases both on the balance sheet and in the measurement of net income, and under U.S. GAAP lessees will capitalize operating leases on the balance sheet similar to finance leases but will treat them as traditional operating leases in the measurement of income.

Question 19

All of the following are true regarding IASB members except:

Accepted Answer

A)  IASB shall comprise 16 members, and up to 3 of those members may be part-time. 
B)  Full-time members must sever employment relationships with former employers. 
C)  Full-time members are not allowed to hold any position giving rise to perceived economic incentives that might call their independence into question. 
D)  Part-time members must sever employment relationships with former employers. 
E)  Primary qualifications for IASB membership are professional competence and practical experience. 
A)  IASB shall comprise 16 members, and up to 3 of those members may be part-time. 
B)  Full-time members must sever employment relationships with former employers. 
C)  Full-time members are not allowed to hold any position giving rise to perceived economic incentives that might call their independence into question. 
D)  Part-time members must sever employment relationships with former employers. 
E)  Primary qualifications for IASB membership are professional competence and practical experience.

Question 20

Which of the following is not a way for a country to use IFRS?

Accepted Answer

A)  Require foreign companies listed on that country's stock exchange to use IFRS for consolidated financial statements. 
B)  Allow foreign companies listed on that country's stock exchange to use IFRS. 
C)  Permit its domestic companies listed on that country's stock exchange to use IFRS. 
D)  Adopt IFRS as that country's national GAAP. 
E)  All of these answer choices are correct. 
A)  Require foreign companies listed on that country's stock exchange to use IFRS for consolidated financial statements. 
B)  Allow foreign companies listed on that country's stock exchange to use IFRS. 
C)  Permit its domestic companies listed on that country's stock exchange to use IFRS. 
D)  Adopt IFRS as that country's national GAAP. 
E)  All of these answer choices are correct.

Exam 11: A: Worldwide Accounting Diversity and International Accounting Standards

Which of the following is not an example of IFRS simplified for SMEs?

What problems are caused by diverse accounting practices?

Which of the following is a correct statement with regard to differences between IFRS and U.S.GAAP?

Which of the following is the organization that governs the IASB?

Which of the following is not one of the steps to prepare IFRS statements for the first time?

All of the following are influences on the development of a country's financial reporting practices except:

The types of differences that exist between IFRS and U.S.GAAP would not generally include:

Which of the following is a pronouncement originally issued by the IASC and is not a pronouncement originally issued by the IASB?

What are some examples of accounting treatments under IFRS for SMEs for recognizing and measuring assets, liabilities, income, and expenses?

Convergence of accounting standards would not occur by:

When measuring assets and liabilities recognized on the opening balance sheet in accordance with first-time adoption of IFRS, the reporting company must:

Which of the following statements is false regarding a country's legal system?

Foreign companies whose stock is listed on a U.S.stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

What are the two primary methods used by countries to incorporate IFRS into their financial reporting requirements for listed companies?

The FASB-IASB convergence project on leases resulted in the following:

All of the following are true regarding IASB members except:

Which of the following is not a way for a country to use IFRS?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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