Question 1

What are recognition differences in international reporting and what would be an example of a difference?

Accepted Answer

Recognition differences relate to whether an item is recognized or not, how it is recognized, or when it is recognized. An example of recognition differences exist for the recognition of research and development costs by using U.S. GAAP or IFRS. U.S. GAAP requires that research and development costs must be expensed immediately. The only exception relates to costs incurred in developing computer software, which must be capitalized when several restrictive criteria are met. IAS 38 also requires immediate expensing of all research costs. Development costs, on the other hand, must be recognized as an internally generated intangible asset when certain criteria are met. These costs are amortized over their useful life not exceeding 20 years.

Question 2

The following information pertains to inventory held by a company at December 31, 2013.   What amount of inventory should be reported under U.S. GAAP?

Accepted Answer

A)  $25,000. 
B)  $21,000. 
C)  $20,000. 
D)  $16,800. 
E)  $16,000. 
A)  $25,000. 
B)  $21,000. 
C)  $20,000. 
D)  $16,800. 
E)  $16,000. C

Question 3

A company acquired a new piece of equipment on January 1, 2011 at a cost of $200,000. The equipment is expected to have a useful life of 10 years, a residual value of $20,000 and is depreciated on a straight-line basis. On January 1, 2013, the equipment was appraised and determined to have a fair value of $190,000 and a residual value of $25,000 and a remaining useful life of 10 years.
At what amount should the equipment be reported on the December 31, 2013 balance sheet under U.S. GAAP?

Accepted Answer

A)  $160,000 
B)  $150,000 
C)  $146,000 
D)  $140,000 
E)  $116,000 
A)  $160,000 
B)  $150,000 
C)  $146,000 
D)  $140,000 
E)  $116,000 C

Question 4

What accounting topics were covered under the FASB short-term convergence project?

Accepted Answer

The topics covered under the s

Question 5

A company acquired a new piece of equipment on January 1, 2011 at a cost of $200,000. The equipment is expected to have a useful life of 10 years, a residual value of $20,000 and is depreciated on a straight-line basis. On January 1, 2013, the equipment was appraised and determined to have a fair value of $190,000 and a residual value of $25,000 and a remaining useful life of 10 years.
At what amount should the equipment be reported on the December 31, 2013 balance sheet under the IFRS revaluation model?

Accepted Answer

A)  $190,000 
B)  $173,500 
C)  $165,000 
D)  $136,000 
E)  $110,000 
A)  $190,000 
B)  $173,500 
C)  $165,000 
D)  $136,000 
E)  $110,000

Question 6

What were the major objectives of the Treaty of Rome?

Accepted Answer

The major objectives of the Treaty of Ro

Question 7

What are the three authoritative pronouncements that make up the International Financial Reporting Standards (IFRS)?

Accepted Answer

The three authoritative pronouncements a

Question 8

The following information pertains to inventory held by a company at December 31, 2013.   What is the amount of inventory loss shown on the income statement under U.S. GAAP?

Accepted Answer

A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000. 
E)  $8,200. 
A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000. 
E)  $8,200.

Question 9

The IASB and FASB are working on several joint projects. What is the purpose of the Revenue Recognition Project?

Accepted Answer

A)  to provide guidance on the application of the acquisition method. 
B)  to enhance the usefulness of information in assessing the financial performance of the reporting enterprise. 
C)  to develop a common comprehensive standard on revenue recognition. 
D)  to develop a common conceptual framework that both boards can use as a basis for future standard-setting. 
E)  to agree upon financial statement titles that will have no differentiation after translation to various languages. 
A)  to provide guidance on the application of the acquisition method. 
B)  to enhance the usefulness of information in assessing the financial performance of the reporting enterprise. 
C)  to develop a common comprehensive standard on revenue recognition. 
D)  to develop a common conceptual framework that both boards can use as a basis for future standard-setting. 
E)  to agree upon financial statement titles that will have no differentiation after translation to various languages.

Question 10

Which of the following is not true about IFRS?

Accepted Answer

A)  The IASB does not have the ability to enforce proper usage of IFRS. 
B)  IFRS is available to any organization or nation that wishes to use those standards. 
C)  IFRS is a comprehensive set of financial reporting standards. 
D)  IFRS includes only pronouncements issued by the IASB. 
E)  IFRS are considered as generally accepted accounting principles. 
A)  The IASB does not have the ability to enforce proper usage of IFRS. 
B)  IFRS is available to any organization or nation that wishes to use those standards. 
C)  IFRS is a comprehensive set of financial reporting standards. 
D)  IFRS includes only pronouncements issued by the IASB. 
E)  IFRS are considered as generally accepted accounting principles.

Question 11

In countries of Latin America:

Accepted Answer

A)  accounting practice is designed to provide adequate information to investors and creditors. 
B)  accounting standards emphasize accounting for high inflation situations. 
C)  banks are the primary source of financing for companies. 
D)  accounting focuses are based recent market economy reforms. 
E)  accounting information is prepared to meet the needs of governmental planners. 
A)  accounting practice is designed to provide adequate information to investors and creditors. 
B)  accounting standards emphasize accounting for high inflation situations. 
C)  banks are the primary source of financing for companies. 
D)  accounting focuses are based recent market economy reforms. 
E)  accounting information is prepared to meet the needs of governmental planners.

Question 12

A company incurs research and development costs of $200,000 in 2013 of which $50,000 of these costs relate to development activities because certain criteria have been met which suggest that an intangible asset has been created.
What amount should be recognized as research and development expense in 2013 using IFRS?

Accepted Answer

A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000. 
A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000.

Question 13

What international organization currently promulgates IFRS?

Accepted Answer

A)  IASB. 
B)  IASC. 
C)  IOSCO. 
D)  FASB. 
E)  EU. 
A)  IASB. 
B)  IASC. 
C)  IOSCO. 
D)  FASB. 
E)  EU.

Question 14

The following information pertains to inventory held by a company on December 31, 2013.   What amount of inventory should be reported under U.S. GAAP?

Accepted Answer

A)  $16,000. 
B)  $27,000. 
C)  $30,000. 
D)  $21,600. 
E)  $20,000. 
A)  $16,000. 
B)  $27,000. 
C)  $30,000. 
D)  $21,600. 
E)  $20,000.

Question 15

What problems are caused by diverse accounting practices?

Accepted Answer

(1) Difficulty in preparation of consoli

Question 16

Which of the following is not a problem caused by diverse accounting practices across countries?

Accepted Answer

A)  Preparation of consolidated financial statements. 
B)  Gaining access to foreign capital markets. 
C)  Lack of comparability of financial statements between companies in the same country. 
D)  Cost and expertise required of consolidations accounting staff. 
E)  Need for a company to maintain multiple sets of accounting records. 
A)  Preparation of consolidated financial statements. 
B)  Gaining access to foreign capital markets. 
C)  Lack of comparability of financial statements between companies in the same country. 
D)  Cost and expertise required of consolidations accounting staff. 
E)  Need for a company to maintain multiple sets of accounting records.

Question 17

The following information pertains to inventory held by a company on December 31, 2013.   What is the amount of inventory loss shown on the income statement under IFRS?

Accepted Answer

A)  $0. 
B)  $3,000. 
C)  $14,000. 
D)  $10,000. 
E)  $8,400. 
A)  $0. 
B)  $3,000. 
C)  $14,000. 
D)  $10,000. 
E)  $8,400.

Question 18

A company incurs research and development costs of $200,000 in 2013 of which $50,000 of these costs relate to development activities because certain criteria have been met which suggest that an intangible asset has been created.
As a result of research and development costs, what is the difference in income between reporting using U.S. GAAP and IFRS in 2013?

Accepted Answer

A)  U.S. GAAP income is $50,000 higher. 
B)  U.S. GAAP income is $50,000 lower. 
C)  IFRS income is $50,000 lower. 
D)  IFRS income is $150,000 lower. 
E)  IFRS income is $150,000 higher. 
A)  U.S. GAAP income is $50,000 higher. 
B)  U.S. GAAP income is $50,000 lower. 
C)  IFRS income is $50,000 lower. 
D)  IFRS income is $150,000 lower. 
E)  IFRS income is $150,000 higher.

Question 19

What are the two major types of legal systems used around the world?

Accepted Answer

Common law, which relies on a limited am

Question 20

What are measurement differences in international reporting and what would be an example of a difference?

Accepted Answer

Measurement differences result in differ

What are recognition differences in international reporting and what would be an example of a difference?

The following information pertains to inventory held by a company at December 31, 2013. What amount of inventory should be reported under U.S. GAAP?

What accounting topics were covered under the FASB short-term convergence project?

What were the major objectives of the Treaty of Rome?

What are the three authoritative pronouncements that make up the International Financial Reporting Standards (IFRS)?

The following information pertains to inventory held by a company at December 31, 2013. What is the amount of inventory loss shown on the income statement under U.S. GAAP?

The IASB and FASB are working on several joint projects. What is the purpose of the Revenue Recognition Project?

Which of the following is not true about IFRS?

In countries of Latin America:

What international organization currently promulgates IFRS?

The following information pertains to inventory held by a company on December 31, 2013. What amount of inventory should be reported under U.S. GAAP?

What problems are caused by diverse accounting practices?

Which of the following is not a problem caused by diverse accounting practices across countries?

The following information pertains to inventory held by a company on December 31, 2013. What is the amount of inventory loss shown on the income statement under IFRS?

What are the two major types of legal systems used around the world?

What are measurement differences in international reporting and what would be an example of a difference?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

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

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters

Exam 11: Worldwide Accounting Diversity and International Accounting Standards

What are recognition differences in international reporting and what would be an example of a difference?

The following information pertains to inventory held by a company at December 31, 2013. What amount of inventory should be reported under U.S. GAAP?

What accounting topics were covered under the FASB short-term convergence project?

What were the major objectives of the Treaty of Rome?

What are the three authoritative pronouncements that make up the International Financial Reporting Standards (IFRS)?

The following information pertains to inventory held by a company at December 31, 2013. What is the amount of inventory loss shown on the income statement under U.S. GAAP?

The IASB and FASB are working on several joint projects. What is the purpose of the Revenue Recognition Project?

Which of the following is not true about IFRS?

In countries of Latin America:

What international organization currently promulgates IFRS?

The following information pertains to inventory held by a company on December 31, 2013. What amount of inventory should be reported under U.S. GAAP?

What problems are caused by diverse accounting practices?

Which of the following is not a problem caused by diverse accounting practices across countries?

The following information pertains to inventory held by a company on December 31, 2013. What is the amount of inventory loss shown on the income statement under IFRS?

What are the two major types of legal systems used around the world?

What are measurement differences in international reporting and what would be an example of a difference?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

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

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters