Question 1

Why is auditing a multinational corporation potentially more difficult than auditing an entity that has only domestic operations?

Accepted Answer

A)  Language differences 
B)  Cultural differences 
C)  Multiple sets of accounting standards 
D)  All of the above 
A)  Language differences 
B)  Cultural differences 
C)  Multiple sets of accounting standards 
D)  All of the above

Question 2

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 3

What is the term used to describe the possibility that a foreign currency will decrease in U.S. dollar value over the life of an asset such as Accounts Receivable?

Accepted Answer

A)  Foreign exchange translation 
B)  Foreign exchange risk 
C)  Hedging 
D)  Foreign currency options 
A)  Foreign exchange translation 
B)  Foreign exchange risk 
C)  Hedging 
D)  Foreign currency options

Question 4

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 5

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 6

Why would a company want its stock cross-listed on the stock exchanges of several countries?

Accepted Answer

A)  To make financial reporting less burdensome for its accounting firm 
B)  In order to use International Financial Reporting Standards 
C)  To gain access to more financial resources than are available in its home country 
D)  All of the above 
A)  To make financial reporting less burdensome for its accounting firm 
B)  In order to use International Financial Reporting Standards 
C)  To gain access to more financial resources than are available in its home country 
D)  All of the above

Question 7

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 8

The practice of having the stock listed and traded on several foreign stock exchanges is known as:

Accepted Answer

A)  SEC registration. 
B)  initial public offering. 
C)  consolidation. 
D)  cross-listing. 
A)  SEC registration. 
B)  initial public offering. 
C)  consolidation. 
D)  cross-listing.

Question 9

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 10

In the context of multinational corporations, the United States, Japan, and members of the European Union are collectively known as the:

Accepted Answer

A)  G8. 
B)  Commonwealth. 
C)  triad. 
D)  OECD. 
A)  G8. 
B)  Commonwealth. 
C)  triad. 
D)  OECD.

Question 11

OECD is an important supranational entity. What do the letters OECD stand for?

Accepted Answer

A)  Organization of Electrical Companies Directorate 
B)  Oil Exporting Countries and Developers 
C)  Organization for Economic Cooperation and Development 
D)  Oil Exporting Corporations and Divisions 
A)  Organization of Electrical Companies Directorate 
B)  Oil Exporting Countries and Developers 
C)  Organization for Economic Cooperation and Development 
D)  Oil Exporting Corporations and Divisions

Question 12

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

Question 13

Determination of net present value involves:

Accepted Answer

A)  forecasting future profits and cash flows. 
B)  discounting future cash flows back to their present value. 
C)  analysis on an after-tax basis. 
D)  All of the above 
A)  forecasting future profits and cash flows. 
B)  discounting future cash flows back to their present value. 
C)  analysis on an after-tax basis. 
D)  All of the above

Question 14

What term is used to describe the process of reducing foreign exchange risk?

Accepted Answer

A)  International accounting 
B)  Exposure 
C)  Hedging 
D)  Globalization 
A)  International accounting 
B)  Exposure 
C)  Hedging 
D)  Globalization

Question 15

What is a key objective of a company's performance evaluation system?

Accepted Answer

A)  To determine how much to pay executives in bonuses and other compensation 
B)  To ensure that the domestic and foreign operations are achieving their objectives 
C)  To control foreign subsidiaries 
D)  To assess the effect of foreign exchange rates on published financial statements 
A)  To determine how much to pay executives in bonuses and other compensation 
B)  To ensure that the domestic and foreign operations are achieving their objectives 
C)  To control foreign subsidiaries 
D)  To assess the effect of foreign exchange rates on published financial statements

Question 16

In 2011, the country with the largest amount of exports was:

Accepted Answer

A)  the United States of America. 
B)  China. 
C)  Japan. 
D)  Germany. 
A)  the United States of America. 
B)  China. 
C)  Japan. 
D)  Germany.

Question 17

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.

Why is auditing a multinational corporation potentially more difficult than auditing an entity that has only domestic operations?

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

What is the term used to describe the possibility that a foreign currency will decrease in U.S. dollar value over the life of an asset such as Accounts Receivable?

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)?

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

Why would a company want its stock cross-listed on the stock exchanges of several countries?

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

The practice of having the stock listed and traded on several foreign stock exchanges is known as:

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:

In the context of multinational corporations, the United States, Japan, and members of the European Union are collectively known as the:

OECD is an important supranational entity. What do the letters OECD stand for?

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?

Determination of net present value involves:

What term is used to describe the process of reducing foreign exchange risk?

What is a key objective of a company's performance evaluation system?

In 2011, the country with the largest amount of exports was:

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

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

Why is auditing a multinational corporation potentially more difficult than auditing an entity that has only domestic operations?

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

What is the term used to describe the possibility that a foreign currency will decrease in U.S. dollar value over the life of an asset such as Accounts Receivable?

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)?

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

Why would a company want its stock cross-listed on the stock exchanges of several countries?

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

The practice of having the stock listed and traded on several foreign stock exchanges is known as:

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:

In the context of multinational corporations, the United States, Japan, and members of the European Union are collectively known as the:

OECD is an important supranational entity. What do the letters OECD stand for?

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?

Determination of net present value involves:

What term is used to describe the process of reducing foreign exchange risk?

What is a key objective of a company's performance evaluation system?

In 2011, the country with the largest amount of exports was:

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

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