Question 1

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

Accepted Answer

A)  Financial accounting 
B)  Managerial 
C)  Taxation 
D)  All of the above 
A)  Financial accounting 
B)  Managerial 
C)  Taxation 
D)  All of the above D

Question 2

Which of the following is a reason for the tremendous increase in the flow of foreign direct investment from 1990 to 2011?

Accepted Answer

A)  The relaxation of transfer pricing regulations 
B)  The liberalization of investment laws in many countries 
C)  The similarities in tax rates and tax laws across the globe 
D)  The universal application of U.S. GAAP accounting standards 
A)  The relaxation of transfer pricing regulations 
B)  The liberalization of investment laws in many countries 
C)  The similarities in tax rates and tax laws across the globe 
D)  The universal application of U.S. GAAP accounting standards B

Question 3

Assume that ABCO is a U.S. multinational corporation. Its foreign subsidiaries must report income in their respective countries according to GAAP in those countries. How must ABCO report its consolidated financial statements?

Accepted Answer

A)  ABCO must choose any one country's accounting standards and combine the subsidiary reports into the parent company's statements using that one country's GAAP. 
B)  Since the company is operating in several different countries, the International Accounting Standards must be used for the consolidated financial statements. 
C)  Since ABCO is a U.S. corporation, U.S. generally accepted accounting principles, or GAAP, must be used for the consolidated financial statements. 
D)  On the consolidated financial statements, each subsidiary's financial results must be shown in the currency of the country where the subsidiary is located. 
A)  ABCO must choose any one country's accounting standards and combine the subsidiary reports into the parent company's statements using that one country's GAAP. 
B)  Since the company is operating in several different countries, the International Accounting Standards must be used for the consolidated financial statements. 
C)  Since ABCO is a U.S. corporation, U.S. generally accepted accounting principles, or GAAP, must be used for the consolidated financial statements. 
D)  On the consolidated financial statements, each subsidiary's financial results must be shown in the currency of the country where the subsidiary is located. C

Question 4

Which of the following is the primary role of an internal auditor?

Accepted Answer

A)  To ensure the adoption of IFRS by all foreign companies 
B)  To prepare the financial statements of the company 
C)  To uncover errors, inefficiencies, and fraud 
D)  The prepare the financial budgets for the company 
A)  To ensure the adoption of IFRS by all foreign companies 
B)  To prepare the financial statements of the company 
C)  To uncover errors, inefficiencies, and fraud 
D)  The prepare the financial budgets for the company

Question 5

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.

Question 6

Which of the following groups is a supranational organization?

Accepted Answer

A)  International Accounting Standards Board 
B)  Organization for Economic Cooperation and Development 
C)  International Federation of Accountants 
D)  All of the above 
A)  International Accounting Standards Board 
B)  Organization for Economic Cooperation and Development 
C)  International Federation of Accountants 
D)  All of the above

Question 7

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 8

Which of the following is an advantage of having a single set of accounting standards used worldwide?

Accepted Answer

A)  Reduced accounting costs for multinational corporations 
B)  Increased power of the FASB 
C)  Reduced number of multinational corporations on the NYSE 
D)  Increased diversity of accounting methods used by multinational corporations 
A)  Reduced accounting costs for multinational corporations 
B)  Increased power of the FASB 
C)  Reduced number of multinational corporations on the NYSE 
D)  Increased diversity of accounting methods used by multinational corporations

Question 9

Which of the following is a reason a company might cross-list itself on a foreign stock exchange?

Accepted Answer

A)  It wants to hedge against currency fluctuations. 
B)  It is less expensive than listing itself solely on a domestic exchange. 
C)  It wants to obtain acquisition currency for acquiring a foreign company. 
D)  It is required for accomplishing foreign direct investment. 
A)  It wants to hedge against currency fluctuations. 
B)  It is less expensive than listing itself solely on a domestic exchange. 
C)  It wants to obtain acquisition currency for acquiring a foreign company. 
D)  It is required for accomplishing foreign direct investment.

Question 10

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 the 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 the foreign country.

Question 11

What is the primary role of internal auditing in a multinational corporation?

Accepted Answer

A)  To assist the external auditors in completing the financial statement audit in a timely fashion 
B)  To make sure that employees comply with local customs and traditions 
C)  To ensure that corporate policies and procedures are being followed and to assess operating efficiency 
D)  To prepare the consolidated financial statement of the corporation in compliance with international accounting standards 
A)  To assist the external auditors in completing the financial statement audit in a timely fashion 
B)  To make sure that employees comply with local customs and traditions 
C)  To ensure that corporate policies and procedures are being followed and to assess operating efficiency 
D)  To prepare the consolidated financial statement of the corporation in compliance with international accounting standards

Question 12

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 13

What is a "greenfield" investment?

Accepted Answer

A)  Farm land held for speculation 
B)  Foreign direct investment whereby a new facility is constructed abroad 
C)  Purchasing an existing facility as a foreign direct investment 
D)  A foreign investment that has been approved by the Environmental Protection Agency 
A)  Farm land held for speculation 
B)  Foreign direct investment whereby a new facility is constructed abroad 
C)  Purchasing an existing facility as a foreign direct investment 
D)  A foreign investment that has been approved by the Environmental Protection Agency

Question 14

The factor used to convert from one country's currency to another country's currency is called the:

Accepted Answer

A)  interest rate. 
B)  cost of capital. 
C)  exchange rate. 
D)  strike price. 
A)  interest rate. 
B)  cost of capital. 
C)  exchange rate. 
D)  strike price.

Question 15

When setting transfer prices among international subsidiaries, the corporation must:

Accepted Answer

A)  make sure that the total tax is minimized. 
B)  ensure that the transfer prices are acceptable to the taxing authorities in the countries involved. 
C)  do whatever it takes to make taxes paid in the United States as low as possible. 
D)  follow the transfer pricing policy used for domestic transfers. 
A)  make sure that the total tax is minimized. 
B)  ensure that the transfer prices are acceptable to the taxing authorities in the countries involved. 
C)  do whatever it takes to make taxes paid in the United States as low as possible. 
D)  follow the transfer pricing policy used for domestic transfers.

Question 16

Which of the following ratios is used in the calculation of the multinationality index (MNI)?

Accepted Answer

A)  Foreign working capital to total working capital 
B)  Foreign cash to total cash 
C)  Foreign employment to total employment 
D)  Foreign loans to total loans 
A)  Foreign working capital to total working capital 
B)  Foreign cash to total cash 
C)  Foreign employment to total employment 
D)  Foreign loans to total loans

Question 17

In international accounting, a "hedge" is:

Accepted Answer

A)  a business transaction made to reduce the exposure of foreign exchange risk. 
B)  the legal barriers in various divisions of a multinational company. 
C)  the loss in US dollar resulting from a decline in the value of the US dollar relative to foreign currencies. 
D)  a form of foreign direct investment. 
A)  a business transaction made to reduce the exposure of foreign exchange risk. 
B)  the legal barriers in various divisions of a multinational company. 
C)  the loss in US dollar resulting from a decline in the value of the US dollar relative to foreign currencies. 
D)  a form of foreign direct investment.

Question 18

What is KPMG?

Accepted Answer

A)  It is a Dutch manufacturing company with plants in over 50 countries worldwide. 
B)  It is an international public accounting firm. 
C)  It is the largest of the multinational corporations listed on the NYSE. 
D)  It is a governmental agency whose aim is promoting international business. 
A)  It is a Dutch manufacturing company with plants in over 50 countries worldwide. 
B)  It is an international public accounting firm. 
C)  It is the largest of the multinational corporations listed on the NYSE. 
D)  It is a governmental agency whose aim is promoting international business.

Question 19

Which of the following terms is used to describe the combining of the financial statements of all subsidiaries, both foreign and domestic, into the financial statements of the parent?

Accepted Answer

A)  Convergence 
B)  Hedging 
C)  Consolidation 
D)  Incorporation 
A)  Convergence 
B)  Hedging 
C)  Consolidation 
D)  Incorporation

Question 20

What does "multinationality" mean?

Accepted Answer

A)  Geographical distribution of sales, assets, and employees of the company 
B)  The diversity of languages spoken at a company's headquarters 
C)  The number of stock exchanges where a company's shares are listed 
D)  None of the above 
A)  Geographical distribution of sales, assets, and employees of the company 
B)  The diversity of languages spoken at a company's headquarters 
C)  The number of stock exchanges where a company's shares are listed 
D)  None of the above

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

Which of the following is a reason for the tremendous increase in the flow of foreign direct investment from 1990 to 2011?

Assume that ABCO is a U.S. multinational corporation. Its foreign subsidiaries must report income in their respective countries according to GAAP in those countries. How must ABCO report its consolidated financial statements?

Which of the following is the primary role of an internal auditor?

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

Which of the following groups is a supranational organization?

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?

Which of the following is an advantage of having a single set of accounting standards used worldwide?

Which of the following is a reason a company might cross-list itself on a foreign stock exchange?

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?

What is the primary role of internal auditing in a multinational corporation?

What countries are collectively known as "the triad"?

What is a "greenfield" investment?

The factor used to convert from one country's currency to another country's currency is called the:

When setting transfer prices among international subsidiaries, the corporation must:

Which of the following ratios is used in the calculation of the multinationality index (MNI)?

In international accounting, a "hedge" is:

What is KPMG?

Which of the following terms is used to describe the combining of the financial statements of all subsidiaries, both foreign and domestic, into the financial statements of the parent?

What does "multinationality" mean?

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

International Taxation

International Transfer Pricing

Management Accounting Issues in Multinational Corporations

Auditing and Corporate Governance: An International Perspective

International Sustainability Reporting

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Exam 1: Introduction to International Accounting

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

Which of the following is a reason for the tremendous increase in the flow of foreign direct investment from 1990 to 2011?

Assume that ABCO is a U.S. multinational corporation. Its foreign subsidiaries must report income in their respective countries according to GAAP in those countries. How must ABCO report its consolidated financial statements?

Which of the following is the primary role of an internal auditor?

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

Which of the following groups is a supranational organization?

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?

Which of the following is an advantage of having a single set of accounting standards used worldwide?

Which of the following is a reason a company might cross-list itself on a foreign stock exchange?

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?

What is the primary role of internal auditing in a multinational corporation?

What countries are collectively known as "the triad"?

What is a "greenfield" investment?

The factor used to convert from one country's currency to another country's currency is called the:

When setting transfer prices among international subsidiaries, the corporation must:

Which of the following ratios is used in the calculation of the multinationality index (MNI)?

In international accounting, a "hedge" is:

What is KPMG?

Which of the following terms is used to describe the combining of the financial statements of all subsidiaries, both foreign and domestic, into the financial statements of the parent?

What does "multinationality" mean?

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

International Taxation

International Transfer Pricing

Management Accounting Issues in Multinational Corporations

Auditing and Corporate Governance: An International Perspective

International Sustainability Reporting

Filters