Question 1

The treatment of inventory in Britain differs from that of the United States in that

Accepted Answer

A)  the British approach to inventory measurement is much less restrictive. 
B)  FIFO is not permitted in Britain. 
C)  LIFO is not permitted in Britain. 
D)  in the United States, LIFO is not permitted. 
A)  the British approach to inventory measurement is much less restrictive. 
B)  FIFO is not permitted in Britain. 
C)  LIFO is not permitted in Britain. 
D)  in the United States, LIFO is not permitted. C

Question 2

Continental Europe has relatively less conservative accounting because of a strong influence of taxes.

Accepted Answer

A) True 
 B)False  False

Question 3

Japanese PE ratios have been reported as relatively high because their earnings have been understated.

Accepted Answer

A) True 
 B)False  True

Question 4

According to Form 20-F of the U.S. SEC,

Accepted Answer

A)  U.S. firms are required to disclose the amount of their foreign earnings. 
B)  foreign firms are required to reconcile their earnings with what earnings would have been under U.S. GAAP. 
C)  foreign firms do not have to disclose the reasons why their GAAP differs from U.S. GAAP, only the amount of the difference. 
D)  the index of conservatism must be disclosed in order to determine the degree to which income differs under different GAAP. 
A)  U.S. firms are required to disclose the amount of their foreign earnings. 
B)  foreign firms are required to reconcile their earnings with what earnings would have been under U.S. GAAP. 
C)  foreign firms do not have to disclose the reasons why their GAAP differs from U.S. GAAP, only the amount of the difference. 
D)  the index of conservatism must be disclosed in order to determine the degree to which income differs under different GAAP.

Question 5

The number of companies that follow IASC standards

Accepted Answer

A)  has declined from its founding 
B)  has remained about the same from its founding 
C)  has increased from its founding 
D)  none of the above 
A)  has declined from its founding 
B)  has remained about the same from its founding 
C)  has increased from its founding 
D)  none of the above

Question 6

It is possible to determine the degree of conservatism of U.K versus U.S. GAAP, because

Accepted Answer

A)  British firms must disclose the difference due to London Stock Exchange requirements. 
B)  British firms voluntarily disclose the difference in order to attract U.S. investors. 
C)  British firms who list an American Depositary Receipt (ADR) or an actual share in the United States must disclose the difference in earnings. 
D)  all of the above. 
A)  British firms must disclose the difference due to London Stock Exchange requirements. 
B)  British firms voluntarily disclose the difference in order to attract U.S. investors. 
C)  British firms who list an American Depositary Receipt (ADR) or an actual share in the United States must disclose the difference in earnings. 
D)  all of the above.

Question 7

If US GAAP is the benchmark in a conservatism comparison with a company in a foreign country, then an index greater that 1 is more conservative.

Accepted Answer

A) True 
 B)False

Question 8

R&D costs are usually capitalized in Germanic countries.

Accepted Answer

A) True 
 B)False

Question 9

Research on the stock market

Accepted Answer

A)  is certain about the international accounting differences and the US stock market 
B)  shows value relevance for Form 20-F reconciliations 
C)  of Pope and Rees indicates that the UK GAAP earnings adjustment information has incremental information for dual listed firms in the US and UK 
D)  greater power distance for non US firms 
A)  is certain about the international accounting differences and the US stock market 
B)  shows value relevance for Form 20-F reconciliations 
C)  of Pope and Rees indicates that the UK GAAP earnings adjustment information has incremental information for dual listed firms in the US and UK 
D)  greater power distance for non US firms

Question 10

Intangibles, such as brands, publishing rights, and patents are generally capitalized except in

Accepted Answer

A)  the United States. 
B)  the Asian countries. 
C)  Switzerland 
D)  Sweden. 
A)  the United States. 
B)  the Asian countries. 
C)  Switzerland 
D)  Sweden.

Question 11

Currently, international standards

Accepted Answer

A)  are developed to allow substantial flexibility 
B)  promote uniformity 
C)  are designed to reduce transparency 
D)  are developed by the IDOT 
A)  are developed to allow substantial flexibility 
B)  promote uniformity 
C)  are designed to reduce transparency 
D)  are developed by the IDOT

Question 12

Goodwill

Accepted Answer

A)  is amortized in the United States 
B)  is immediately expensed in Japan 
C)  is amortized in Britain 
D)  is subject to an impairment test in Britain. 
A)  is amortized in the United States 
B)  is immediately expensed in Japan 
C)  is amortized in Britain 
D)  is subject to an impairment test in Britain.

Question 13

When comparing the relative conservatism of U.S. versus foreign companies,

Accepted Answer

A)  U.S. firms tend to be less conservative than Japanese firms, because Japanese firms are more heavily influenced by tax law. 
B)  U.S. firms are more conservative than Continental European firms due to the dominance of capital market disclosures in the United States. 
C)  European firms are less focused on tax law than are the U.S. firms. 
D)  British firms are more conservative than U.S. firms, because they tend to take goodwill to income rather than to equity as is the case in the United States. 
A)  U.S. firms tend to be less conservative than Japanese firms, because Japanese firms are more heavily influenced by tax law. 
B)  U.S. firms are more conservative than Continental European firms due to the dominance of capital market disclosures in the United States. 
C)  European firms are less focused on tax law than are the U.S. firms. 
D)  British firms are more conservative than U.S. firms, because they tend to take goodwill to income rather than to equity as is the case in the United States.

Question 14

R&D costs are required to be expensed immediately in

Accepted Answer

A)  the Asian countries. 
B)  the United States. 
C)  Sweden. 
D)  the United Kingdom. 
A)  the Asian countries. 
B)  the United States. 
C)  Sweden. 
D)  the United Kingdom.

Question 15

Earnings tend to be more conservative or understated in France and Germany than in the united Kingdom.

Accepted Answer

A) True 
 B)False

Question 16

Historical cost is frequently modified by revaluations in

Accepted Answer

A)  the United States. 
B)  the Asian countries. 
C)  the United Kingdom and the Netherlands. 
D)  Germany. 
A)  the United States. 
B)  the Asian countries. 
C)  the United Kingdom and the Netherlands. 
D)  Germany.

Question 17

Problems and costs arising from international accounting diversity

Accepted Answer

A)  are not restated by financial statement users 
B)  affect 95 percent of financial statement users according to Choi and Levich 
C)  are very real 
D)  affect 25 percent of financial statement users according to Choi and Levich 
A)  are not restated by financial statement users 
B)  affect 95 percent of financial statement users according to Choi and Levich 
C)  are very real 
D)  affect 25 percent of financial statement users according to Choi and Levich

Question 18

In dissimilar economic environments, accounting diversity is illogical and leads to noncomparable results.

Accepted Answer

A) True 
 B)False

Question 19

As a result of research on the degree of conservatism among U.S. and British firms, it was found that

Accepted Answer

A)  British and American firms are about the same in terms of the degree of conservatism. 
B)  British earnings are more conservative than are U.S. earnings. 
C)  U.S. earnings are more conservative than are British earnings. 
D)  goodwill is not as significant a factor in determining earnings differences as was once thought. 
A)  British and American firms are about the same in terms of the degree of conservatism. 
B)  British earnings are more conservative than are U.S. earnings. 
C)  U.S. earnings are more conservative than are British earnings. 
D)  goodwill is not as significant a factor in determining earnings differences as was once thought.

Question 20

Which of the following accurately describes the differences between the United States and the United Kingdom in terms of conservatism in earnings measurement?

Accepted Answer

A)  The British tend to be more conservative in earnings measurements than do Americans. 
B)  British earnings are higher than U.S. earnings because U.S. firms tend to capitalize interest costs relating to certain types of assets during acquisition or construction. 
C)  U.S. earnings tend to be lower than British earnings since U.S. firms capitalize and amortize goodwill. 
D)  none of the above. 
A)  The British tend to be more conservative in earnings measurements than do Americans. 
B)  British earnings are higher than U.S. earnings because U.S. firms tend to capitalize interest costs relating to certain types of assets during acquisition or construction. 
C)  U.S. earnings tend to be lower than British earnings since U.S. firms capitalize and amortize goodwill. 
D)  none of the above.

The treatment of inventory in Britain differs from that of the United States in that

Continental Europe has relatively less conservative accounting because of a strong influence of taxes.

Japanese PE ratios have been reported as relatively high because their earnings have been understated.

According to Form 20-F of the U.S. SEC,

The number of companies that follow IASC standards

It is possible to determine the degree of conservatism of U.K versus U.S. GAAP, because

If US GAAP is the benchmark in a conservatism comparison with a company in a foreign country, then an index greater that 1 is more conservative.

R&D costs are usually capitalized in Germanic countries.

Research on the stock market

Intangibles, such as brands, publishing rights, and patents are generally capitalized except in

Currently, international standards

Goodwill

When comparing the relative conservatism of U.S. versus foreign companies,

R&D costs are required to be expensed immediately in

Earnings tend to be more conservative or understated in France and Germany than in the united Kingdom.

Historical cost is frequently modified by revaluations in

Problems and costs arising from international accounting diversity

In dissimilar economic environments, accounting diversity is illogical and leads to noncomparable results.

As a result of research on the degree of conservatism among U.S. and British firms, it was found that

Which of the following accurately describes the differences between the United States and the United Kingdom in terms of conservatism in earnings measurement?

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

International Segment Reporting

Foreign Currency Transactions and Translation

International Accounting for Price Changes

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters

Exam 5: International Financial Statement Analysis

The treatment of inventory in Britain differs from that of the United States in that

Continental Europe has relatively less conservative accounting because of a strong influence of taxes.

Japanese PE ratios have been reported as relatively high because their earnings have been understated.

According to Form 20-F of the U.S. SEC,

The number of companies that follow IASC standards

It is possible to determine the degree of conservatism of U.K versus U.S. GAAP, because

If US GAAP is the benchmark in a conservatism comparison with a company in a foreign country, then an index greater that 1 is more conservative.

R&D costs are usually capitalized in Germanic countries.

Research on the stock market

Intangibles, such as brands, publishing rights, and patents are generally capitalized except in

Currently, international standards

Goodwill

When comparing the relative conservatism of U.S. versus foreign companies,

R&D costs are required to be expensed immediately in

Earnings tend to be more conservative or understated in France and Germany than in the united Kingdom.

Historical cost is frequently modified by revaluations in

Problems and costs arising from international accounting diversity

In dissimilar economic environments, accounting diversity is illogical and leads to noncomparable results.

As a result of research on the degree of conservatism among U.S. and British firms, it was found that

Which of the following accurately describes the differences between the United States and the United Kingdom in terms of conservatism in earnings measurement?

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

International Segment Reporting

Foreign Currency Transactions and Translation

International Accounting for Price Changes

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters