Question 1

Which of the following statements is false regarding a country's legal system?

Accepted Answer

A)  The two major types of legal systems are common law and codified Roman law. 
B)  Common law originated in the Roman jus civile. 
C)  Code law countries tend to have more statutes governing a wider range of human activity. 
D)  Accounting law is rather general in code law countries. 
E)  A nongovernmental organization is more likely to develop in a common law country than in a code law country. 
A)  The two major types of legal systems are common law and codified Roman law. 
B)  Common law originated in the Roman jus civile. 
C)  Code law countries tend to have more statutes governing a wider range of human activity. 
D)  Accounting law is rather general in code law countries. 
E)  A nongovernmental organization is more likely to develop in a common law country than in a code law country.

Question 2

Which one of the following is not a background requirement for any IASB members?

Accepted Answer

A)  Audit. 
B)  Tax. 
C)  Financial statement preparation. 
D)  Academia. 
E)  Financial statement user. 
A)  Audit. 
B)  Tax. 
C)  Financial statement preparation. 
D)  Academia. 
E)  Financial statement user.

Question 3

Which two EU directives have helped harmonize accounting standards?

Accepted Answer

The fourth and seventh directives have h

Question 4

Foreign companies whose stock is listed on a U.S. stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

Accepted Answer

A)  Form 8-A. 
B)  Form 10-A. 
C)  Form 16-K. 
D)  Form 20-F. 
E)  Form 20-K. 
A)  Form 8-A. 
B)  Form 10-A. 
C)  Form 16-K. 
D)  Form 20-F. 
E)  Form 20-K.

Question 5

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Accepted Answer

A)  Measuring asset impairment. 
B)  Classifying extraordinary items. 
C)  Sale and leaseback gain recognition. 
D)  Measuring salaries expense. 
E)  Prior service cost recognition for pension amendments. 
A)  Measuring asset impairment. 
B)  Classifying extraordinary items. 
C)  Sale and leaseback gain recognition. 
D)  Measuring salaries expense. 
E)  Prior service cost recognition for pension amendments.

Question 6

Which of the following statements is false regarding providers of financing?

Accepted Answer

A)  There is less pressure to provide accounting information in those countries in which financing is primarily by banks. 
B)  In countries where capital stock is the primary source of financing, accounting emphasizes the income statement. 
C)  Disclosures are less extensive in those countries financed primarily by stock. 
D)  Bankers tend to focus more on solvency and stockholders focus more on profitability. 
E)  As companies become more dependent on financing by stock, more information is demanded. 
A)  There is less pressure to provide accounting information in those countries in which financing is primarily by banks. 
B)  In countries where capital stock is the primary source of financing, accounting emphasizes the income statement. 
C)  Disclosures are less extensive in those countries financed primarily by stock. 
D)  Bankers tend to focus more on solvency and stockholders focus more on profitability. 
E)  As companies become more dependent on financing by stock, more information is demanded.

Question 7

A company sells a building to a bank in 2013 at a gain of $100,000 and immediately leases the building back for period of five years. The lease is accounted for as an operating lease. The building was originally purchased for $200,000 and currently had a book value of $50,000 at the date of the sale.
As a result of the sale and leaseback transaction in 2013, what is the difference between income using U.S. GAAP and IFRS in 2014?

Accepted Answer

A)  $0. 
B)  U.S. GAAP income is $20,000 higher. 
C)  IFRS income is $80,000 lower. 
D)  IFRS income is $60,000 lower. 
E)  IFRS income is $80,000 higher. 
A)  $0. 
B)  U.S. GAAP income is $20,000 higher. 
C)  IFRS income is $80,000 lower. 
D)  IFRS income is $60,000 lower. 
E)  IFRS income is $80,000 higher.

Question 8

In countries where there is less pressure for public accountability and information disclosure:

Accepted Answer

A)  information needs can be satisfied by requesting information from internal company sources. 
B)  public offerings of stock shares are the primary source of financing for companies. 
C)  accounting information is prepared to meet the needs of taxing authorities. 
D)  accounting standards emphasize accounting for high inflation situations. 
E)  the accounting focus is on recent market economy reforms. 
A)  information needs can be satisfied by requesting information from internal company sources. 
B)  public offerings of stock shares are the primary source of financing for companies. 
C)  accounting information is prepared to meet the needs of taxing authorities. 
D)  accounting standards emphasize accounting for high inflation situations. 
E)  the accounting focus is on recent market economy reforms.

Question 9

How did the early International Accounting Standards (IAS) obtain support from a sufficient number of board members?

Accepted Answer

They allowed at leas

Question 10

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Accepted Answer

A)  Inventory valuation. 
B)  Capitalizing development costs. 
C)  Classifying deferred taxes as current or noncurrent. 
D)  Acquisition value for a subsidiary. 
E)  Liability for restructuring charges. 
A)  Inventory valuation. 
B)  Capitalizing development costs. 
C)  Classifying deferred taxes as current or noncurrent. 
D)  Acquisition value for a subsidiary. 
E)  Liability for restructuring charges.

Question 11

Why does each country have its own unique set of financial reporting practices?

Accepted Answer

A survey identified five commonly accept

Question 12

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

Accepted Answer

A)  $25,000 
B)  $21,000 
C)  $20,000 
D)  $4,000 
E)  $5,000 
A)  $25,000 
B)  $21,000 
C)  $20,000 
D)  $4,000 
E)  $5,000

Question 13

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 U.S. GAAP?

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 14

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 U.S. GAAP?

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 15

A company sells a building to a bank in 2013 at a gain of $100,000 and immediately leases the building back for period of five years. The lease is accounted for as an operating lease. The building was originally purchased for $200,000 and currently had a book value of $50,000 at the date of the sale.
Assume the seller of the building is a U.S. company that is preparing to convert from U.S. GAAP to IFRS. At December 31, 2014, with regard to the sale and leaseback accounting, what amount would reconcile stockholders' equity from U.S. GAAP to IFRS at December 31, 2014?

Accepted Answer

A)  Increase $40,000. 
B)  Decrease $40,000. 
C)  Decrease $60,000. 
D)  Increase $60,000. 
E)  No amount would be necessary for reconciliation. 
A)  Increase $40,000. 
B)  Decrease $40,000. 
C)  Decrease $60,000. 
D)  Increase $60,000. 
E)  No amount would be necessary for reconciliation.

Question 16

The IASB and FASB are working on several joint projects. Which of the following is not a topic of the Revenue Recognition Project?

Accepted Answer

A)  Eliminate inconsistencies in existing literature. 
B)  Cash flow presentation of revenue. 
C)  Business models issues for revenue recognition. 
D)  Conceptual basis as framework for future issues of revenue recognition. 
E)  Contract-based revenue recognition. 
A)  Eliminate inconsistencies in existing literature. 
B)  Cash flow presentation of revenue. 
C)  Business models issues for revenue recognition. 
D)  Conceptual basis as framework for future issues of revenue recognition. 
E)  Contract-based revenue recognition.

Question 17

What is meant by harmonization of accounting standards?

Accepted Answer

Harmonization is the process of reducing

Question 18

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 IFRS?

Accepted Answer

A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000. 
E)  $6,000. 
A)  $1,000. 
B)  $2,000. 
C)  $4,000. 
D)  $5,000. 
E)  $6,000.

Question 19

Which of the following is not a way for a country to use IFRS?

Accepted Answer

A)  Require foreign companies listed on that country's stock exchange to use IFRS for consolidated financial statements. 
B)  Allow foreign companies listed on that country's stock exchange to use IFRS. 
C)  Allow that country's companies listed on its stock exchange to use IFRS. 
D)  Adopt IFRS as that country's national GAAP. 
E)  All of these are ways a country can use IFRS. 
A)  Require foreign companies listed on that country's stock exchange to use IFRS for consolidated financial statements. 
B)  Allow foreign companies listed on that country's stock exchange to use IFRS. 
C)  Allow that country's companies listed on its stock exchange to use IFRS. 
D)  Adopt IFRS as that country's national GAAP. 
E)  All of these are ways a country can use IFRS.

Question 20

Which topic was not covered by FASB under the short-term convergence project?

Accepted Answer

A)  Inventory costs. 
B)  Asset exchanges. 
C)  Liability transfers. 
D)  Accounting changes. 
E)  Earnings-per-share. 
A)  Inventory costs. 
B)  Asset exchanges. 
C)  Liability transfers. 
D)  Accounting changes. 
E)  Earnings-per-share.

Which of the following statements is false regarding a country's legal system?

Which one of the following is not a background requirement for any IASB members?

Which two EU directives have helped harmonize accounting standards?

Foreign companies whose stock is listed on a U.S. stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Which of the following statements is false regarding providers of financing?

In countries where there is less pressure for public accountability and information disclosure:

How did the early International Accounting Standards (IAS) obtain support from a sufficient number of board members?

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Why does each country have its own unique set of financial reporting practices?

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

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 U.S. GAAP?

The IASB and FASB are working on several joint projects. Which of the following is not a topic of the Revenue Recognition Project?

What is meant by harmonization of accounting standards?

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 IFRS?

Which of the following is not a way for a country to use IFRS?

Which topic was not covered by FASB under the short-term convergence project?

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

Which of the following statements is false regarding a country's legal system?

Which one of the following is not a background requirement for any IASB members?

Which two EU directives have helped harmonize accounting standards?

Foreign companies whose stock is listed on a U.S. stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Which of the following statements is false regarding providers of financing?

In countries where there is less pressure for public accountability and information disclosure:

How did the early International Accounting Standards (IAS) obtain support from a sufficient number of board members?

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

Why does each country have its own unique set of financial reporting practices?

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

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 U.S. GAAP?

The IASB and FASB are working on several joint projects. Which of the following is not a topic of the Revenue Recognition Project?

What is meant by harmonization of accounting standards?

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 IFRS?

Which of the following is not a way for a country to use IFRS?

Which topic was not covered by FASB under the short-term convergence project?

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