Question 1

In Brazil, for 20 years during the last half of the 20th century

Accepted Answer

A)  a general indexation approach to restate historical costs in terms of current purchasing power. 
B)  current cost accounting was used 
C)  used SFAS 33. 
D)  company law required current replacement cost reports. 
A)  a general indexation approach to restate historical costs in terms of current purchasing power. 
B)  current cost accounting was used 
C)  used SFAS 33. 
D)  company law required current replacement cost reports.

Question 2

Inflation accounting regulations would tend to be more detailed and comprehensive in which of the following systems?

Accepted Answer

A)  the common law system. 
B)  countries that follow the British tradition. 
C)  the civil law system. 
D)  countries where culture is influential. 
A)  the common law system. 
B)  countries that follow the British tradition. 
C)  the civil law system. 
D)  countries where culture is influential.

Question 3

Philips introduced current value financial statements

Accepted Answer

A)  to be consistent with international accounting standards 
B)  because no company was using general purchasing power adjustments 
C)  for internal cost accounting purposes 
D)  to consolidate the Indonesian subsidiary 
A)  to be consistent with international accounting standards 
B)  because no company was using general purchasing power adjustments 
C)  for internal cost accounting purposes 
D)  to consolidate the Indonesian subsidiary

Question 4

According to the Philips approach to accounting for inflation,

Accepted Answer

A)  a gearing adjustment was used to reflect the extent to which the company benefits from financing the purchase of capital assets by long term debt rather than by equity. 
B)  net realizable value was used to value assets, but replacement values were not used. 
C)  target costs were used for inventory rather than standard costs. 
D)  physical assets were adjusted to current values, but there was no gain or loss from holding net financial assets. 
A)  a gearing adjustment was used to reflect the extent to which the company benefits from financing the purchase of capital assets by long term debt rather than by equity. 
B)  net realizable value was used to value assets, but replacement values were not used. 
C)  target costs were used for inventory rather than standard costs. 
D)  physical assets were adjusted to current values, but there was no gain or loss from holding net financial assets.

Question 5

During the 1990s, Philips reverted back from inflation-adjusted statements to historical cost statements in order to
I..improve communications to shareholders
II..simplify accounting systems

Accepted Answer

A)  only I 
B)  only II 
C)  I and II 
D)  neither I or II 
A)  only I 
B)  only II 
C)  I and II 
D)  neither I or II

Question 6

In Britain,

Accepted Answer

A)  companies use general purchasing power accounting 
B)  many companies have periodic revaluations of their land and buildings to market values 
C)  has a weak relation between economics and accounting 
D)  inflation rules are kept because of the fear of renewed higher prices relative to the remainder of Europe. 
A)  companies use general purchasing power accounting 
B)  many companies have periodic revaluations of their land and buildings to market values 
C)  has a weak relation between economics and accounting 
D)  inflation rules are kept because of the fear of renewed higher prices relative to the remainder of Europe.

Question 7

IAS 15 on inflation approach did require the
I..general purchasing power approach
II..current cost approach

Accepted Answer

A)  only I 
B)  only II 
C)  either I or II 
D)  neither I or II 
A)  only I 
B)  only II 
C)  either I or II 
D)  neither I or II

Question 8

The effect of inflation on nonmonetary assets is reflected in the

Accepted Answer

A)  only I 
B)  only II 
C)  both I and II 
D)  neither I or II 
A)  only I 
B)  only II 
C)  both I and II 
D)  neither I or II

Question 9

A major difference between the British and U.S. approach to inflation accounting (before the standards were withdrawn) was that

Accepted Answer

A)  the British were allowed to use current cost accounting in primary or supplementary financial statements. 
B)  the British did not permit a gearing adjustment. 
C)  the U.S. allowed general purchasing power adjustments but not current cost adjustments. 
D)  U.S. firms took their inflation adjustments to a reserve account. 
A)  the British were allowed to use current cost accounting in primary or supplementary financial statements. 
B)  the British did not permit a gearing adjustment. 
C)  the U.S. allowed general purchasing power adjustments but not current cost adjustments. 
D)  U.S. firms took their inflation adjustments to a reserve account.

Question 10

Current cost accounting is required in the
I..UK
II..US

Accepted Answer

A)  only I 
B)  only II 
C)  I and II 
D)  neither I nor II 
A)  only I 
B)  only II 
C)  I and II 
D)  neither I nor II

Question 11

What has been the trend in inflation accounting in Britain and the U.S.?

Accepted Answer

A)  change to current cost accounting 
B)  change to general purchasing power adjustments 
C)  continued use of an index in general purchasing power statements 
D)  dropping of inflation accounting 
A)  change to current cost accounting 
B)  change to general purchasing power adjustments 
C)  continued use of an index in general purchasing power statements 
D)  dropping of inflation accounting

Question 12

Shared values and attitudes

Accepted Answer

A)  affect business and managerial behavior, which is similar from country to country due to inflation. 
B)  are so deeply ingrained that they are usually not influenced by world wide inflation forces. 
C)  are also known as culture. 
D)  all of the above. 
A)  affect business and managerial behavior, which is similar from country to country due to inflation. 
B)  are so deeply ingrained that they are usually not influenced by world wide inflation forces. 
C)  are also known as culture. 
D)  all of the above.

Question 13

IAS 29 is the current IASB standard on hyperinflationary economies.

Accepted Answer

A) True 
 B)False

Question 14

General purchasing power accounting

Accepted Answer

A)  is required for U.S. companies if the inflation rate exceeds 10 percent three years in a row. 
B)  is designed to report accounts in units of the same purchasing power. 
C)  assumes that the general level of inflation is irrelevant. 
D)  is not permitted in British accounting. 
A)  is required for U.S. companies if the inflation rate exceeds 10 percent three years in a row. 
B)  is designed to report accounts in units of the same purchasing power. 
C)  assumes that the general level of inflation is irrelevant. 
D)  is not permitted in British accounting.

Question 15

Controversy remains for price change accounting with respect to
I..the gearing adjustment
II..the treatment of gains and losses on monetary items

Accepted Answer

A)  only I 
B)  only II 
C)  I and II 
D)  neither I or II 
A)  only I 
B)  only II 
C)  I and II 
D)  neither I or II

Question 16

Current UK GAAP does not require current value accounting reporting.

Accepted Answer

A) True 
 B)False

Question 17

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What would be the unrealized holding gain in constant purchasing power terms?

Accepted Answer

A)  $100,000 
B)  $220,000 
C)  $120,000 
D)  $ 80,000 
E)  $ 20,000
F) $280,000 
A)  $100,000 
B)  $220,000 
C)  $120,000 
D)  $ 80,000 
E)  $ 20,000
F) $280,000

Question 18

In high inflation economies financial liabilities are

Accepted Answer

A)  poor choices for MNEs to have on the balance sheet 
B)  good choices for MNEs to have on the balance sheet 
C)  questioned by labor unions 
D)  restrictive for MNEs 
A)  poor choices for MNEs to have on the balance sheet 
B)  good choices for MNEs to have on the balance sheet 
C)  questioned by labor unions 
D)  restrictive for MNEs

Question 19

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What is the unrealized holding gain in current cost terms?

Accepted Answer

A)  $100,000 
B)  $220,000 
C)  $120,000 
D)  $ 80,000 
E)  $ 20,000
F) $280,000 
A)  $100,000 
B)  $220,000 
C)  $120,000 
D)  $ 80,000 
E)  $ 20,000
F) $280,000

Question 20

Current value accounting

Accepted Answer

A)  is required for Dutch companies. 
B)  takes into consideration that the prices of specific assets have changed. 
C)  assumes that the purchasing power of money has gone up. 
D)  is required by the FASB to be used in highly inflationary countries. 
A)  is required for Dutch companies. 
B)  takes into consideration that the prices of specific assets have changed. 
C)  assumes that the purchasing power of money has gone up. 
D)  is required by the FASB to be used in highly inflationary countries.

In Brazil, for 20 years during the last half of the 20^th century

Inflation accounting regulations would tend to be more detailed and comprehensive in which of the following systems?

Philips introduced current value financial statements

According to the Philips approach to accounting for inflation,

During the 1990s, Philips reverted back from inflation-adjusted statements to historical cost statements in order to I..improve communications to shareholders II..simplify accounting systems

In Britain,

IAS 15 on inflation approach did require the I..general purchasing power approach II..current cost approach

The effect of inflation on nonmonetary assets is reflected in the

A major difference between the British and U.S. approach to inflation accounting (before the standards were withdrawn) was that

Current cost accounting is required in the I..UK II..US

What has been the trend in inflation accounting in Britain and the U.S.?

Shared values and attitudes

IAS 29 is the current IASB standard on hyperinflationary economies.

General purchasing power accounting

Controversy remains for price change accounting with respect to I..the gearing adjustment II..the treatment of gains and losses on monetary items

Current UK GAAP does not require current value accounting reporting.

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What would be the unrealized holding gain in constant purchasing power terms?

In high inflation economies financial liabilities are

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What is the unrealized holding gain in current cost terms?

Current value accounting

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Financial Statement Analysis

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

International Segment Reporting

Foreign Currency Transactions and Translation

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters

Exam 11: International Accounting for Price Changes

In Brazil, for 20 years during the last half of the 20th century

Inflation accounting regulations would tend to be more detailed and comprehensive in which of the following systems?

Philips introduced current value financial statements

According to the Philips approach to accounting for inflation,

During the 1990s, Philips reverted back from inflation-adjusted statements to historical cost statements in order to I..improve communications to shareholders II..simplify accounting systems

In Britain,

IAS 15 on inflation approach did require the I..general purchasing power approach II..current cost approach

The effect of inflation on nonmonetary assets is reflected in the

A major difference between the British and U.S. approach to inflation accounting (before the standards were withdrawn) was that

Current cost accounting is required in the I..UK II..US

What has been the trend in inflation accounting in Britain and the U.S.?

Shared values and attitudes

IAS 29 is the current IASB standard on hyperinflationary economies.

General purchasing power accounting

Controversy remains for price change accounting with respect to I..the gearing adjustment II..the treatment of gains and losses on monetary items

Current UK GAAP does not require current value accounting reporting.

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What would be the unrealized holding gain in constant purchasing power terms?

In high inflation economies financial liabilities are

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What is the unrealized holding gain in current cost terms?

Current value accounting

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Financial Statement Analysis

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

International Segment Reporting

Foreign Currency Transactions and Translation

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters

In Brazil, for 20 years during the last half of the 20^th century