Question 1

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. B

Question 2

The following information pertains to inventory held by a company at December 31, 2011. $$\begin{array} { | l | r | } 
\hline \text { Historical cost } & \$ 25,000 \
\hline \text { Replacement cost } & \$ 20,000 \
\hline \text { Net realizable value } & \$ 21,000 \
\hline \text { Normal profit Margin } & 20 \% \
\hline
\end{array}$$
-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. Under US GAAP The inventory is reported at the lower of cost or market where market is defined as replacement cost subject to ceiling and floor limitations. 
A)  $25,000. 
B)  $21,000. 
C)  $20,000. 
D)  $16,800. 
E)  $16,000. Under US GAAP The inventory is reported at the lower of cost or market where market is defined as replacement cost subject to ceiling and floor limitations. C

Question 3

The following information pertains to inventory held by a company at December 31, 2011. $$\begin{array} { | l | r | } 
\hline \text { Historical cost } & \$ 25,000 \
\hline \text { Replacement cost } & \$ 20,000 \
\hline \text { Net realizable value } & \$ 21,000 \
\hline \text { Normal profit Margin } & 20 \% \
\hline
\end{array}$$
-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 According to IFRS, inventory will be reported at lower of cost or net realizable value. 
A)  $25,000 
B)  $21,000 
C)  $20,000 
D)  $4,000 
E)  $5,000 According to IFRS, inventory will be reported at lower of cost or net realizable value. B

Question 4

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.

Question 5

A company acquired a new piece of equipment on January 1, 2009 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, 2011, 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, 2011 balance sheet under the IFRS cost model?

Accepted Answer

A)  $160,000 
B)  $150,000 
C)  $146,000 
D)  $140,000 
E)  $116,000 Under the IFRS cost model the equipment would be reported at depreciated historical cost. (200,000-20,000)/10 years or $18,000 per year. After 3 years the book value is (200,000-54,000) or $146,000. 
A)  $160,000 
B)  $150,000 
C)  $146,000 
D)  $140,000 
E)  $116,000 Under the IFRS cost model the equipment would be reported at depreciated historical cost. (200,000-20,000)/10 years or $18,000 per year. After 3 years the book value is (200,000-54,000) or $146,000.

Question 6

What were the major objectives of the Treaty of Rome?

Accepted Answer

The major objectives of the Treaty of Ro

Question 7

A company sells a building to a bank in 2011 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 2011, what is the difference between income using U.S. GAAP and IFRS in 2012?

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. Because the entire gain is recognized immediately under IFRS, income is higher than U.S. GAAP. In 2012, there is no IFRS recognition and there is one year amortized revenue recognition for U.S. GAAP. 
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. Because the entire gain is recognized immediately under IFRS, income is higher than U.S. GAAP. In 2012, there is no IFRS recognition and there is one year amortized revenue recognition for U.S. GAAP.

Question 8

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

Accepted Answer

The three authoritative pronouncements a

Question 9

What are the six key FASB initiatives to further convergence?

Accepted Answer

The six key FASB initiatives to further

Question 10

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 11

What is the IOSCO?

Accepted Answer

IOSCO is an organization of stock exchan

Question 12

A company sells a building to a bank in 2011 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, 2012, with regard to the sale and leaseback accounting, what amount would reconcile stockholders' equity from U.S. GAAP to IFRS at December 31, 2012?

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. U.S. GAAP has recognized $20,000 en each of two years to total $40,000 and reconciliation would need $60,000 more to attain the $100,000 amount that would be recognized to date under IFRS. 
A)  Increase $40,000. 
B)  Decrease $40,000. 
C)  Decrease $60,000. 
D)  Increase $60,000. 
E)  No amount would be necessary for reconciliation. U.S. GAAP has recognized $20,000 en each of two years to total $40,000 and reconciliation would need $60,000 more to attain the $100,000 amount that would be recognized to date under IFRS.

Question 13

A company sells a building to a bank in 2011 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 2011, what is the difference between income using U.S. GAAP and IFRS in 2011?

Accepted Answer

A)  U.S. GAAP income is $80,000 higher. 
B)  U.S. GAAP income is $100,000 higher. 
C)  IFRS income is $50,000 lower. 
D)  IFRS income is $100,000 lower. 
E)  IFRS income is $80,000 higher. Because the entire gain is recognized immediately under IFRS, income is higher than U.S. GAAP. 
A)  U.S. GAAP income is $80,000 higher. 
B)  U.S. GAAP income is $100,000 higher. 
C)  IFRS income is $50,000 lower. 
D)  IFRS income is $100,000 lower. 
E)  IFRS income is $80,000 higher. Because the entire gain is recognized immediately under IFRS, income is higher than U.S. GAAP.

Question 14

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

Accepted Answer

Measurement differences result in differ

Question 15

Which of the following are not authoritative pronouncements of International Financial Reporting Standards (IFRSs)?
1) International Financial Reporting Standards issued by the IASB
2) International Accounting Standards issued by the IASC and adopted by the IASB
3) Intrepretations originated by the International Financial Reporting Interpretations Committee (IFRIC)
4) U.S. Generally Accepted Accounting Principles

Accepted Answer

A)  4 only. 
B)  3 and 4. 
C)  1, 3, and 4. 
D)  2, 3, and 4. 
E)  1, 2, 3, and 4. 
A)  4 only. 
B)  3 and 4. 
C)  1, 3, and 4. 
D)  2, 3, and 4. 
E)  1, 2, 3, and 4.

Question 16

A company incurs research and development costs of $200,000 in 2011 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 2011?

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. Because $50,000 is capitalized under IAS 38, income under IFRS is higher than U.S. GAAP. 
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. Because $50,000 is capitalized under IAS 38, income under IFRS is higher than U.S. GAAP.

Question 17

Which of the following are not key FASB initiatives to further converge IFRS and U.S. GAAP?

Accepted Answer

A)  Short-term convergence projects. 
B)  Joint projects sharing FASB and IASB staff resources. 
C)  Having the IASB Chairman in-residence at the FASB office. 
D)  Monitoring ongoing IASB projects. 
E)  Researching differences between U.S. GAAP and IFRS. 
A)  Short-term convergence projects. 
B)  Joint projects sharing FASB and IASB staff resources. 
C)  Having the IASB Chairman in-residence at the FASB office. 
D)  Monitoring ongoing IASB projects. 
E)  Researching differences between U.S. GAAP and IFRS.

Question 18

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } 
\text { Historical cost } & \$ 30,000 \
\text { Replacement cost } & \$ 20,000 \
\text { Net realizable value } & \$ 27,000 \
\text { Normal profit margin } & 20 \%
\end{array}$$
-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. Under U.S. GAAP the inventory is reported at the lower of cost or market where market is defined as replacement cost subject to ceiling and floor limitations. 
A)  $16,000. 
B)  $27,000. 
C)  $30,000. 
D)  $21,600. 
E)  $20,000. Under U.S. GAAP the inventory is reported at the lower of cost or market where market is defined as replacement cost subject to ceiling and floor limitations.

Question 19

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 20

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } 
\text { Historical cost } & \$ 30,000 \
\text { Replacement cost } & \$ 20,000 \
\text { Net realizable value } & \$ 27,000 \
\text { Normal profit margin } & 20 \%
\end{array}$$
-What amount of inventory should be reported under IFRS?

Accepted Answer

A)  $25,000. 
B)  $27,000. 
C)  $30,000. 
D)  $5,000. 
E)  $2,000. According to IFRS, inventory will be reported at lower of cost or net realizable value. 
A)  $25,000. 
B)  $27,000. 
C)  $30,000. 
D)  $5,000. 
E)  $2,000. According to IFRS, inventory will be reported at lower of cost or net realizable value.

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

The following information pertains to inventory held by a company at December 31, 2011. Historical cost \ 25,000 Replacement cost \ 20,000 Net realizable value \ 21,000 Normal profit Margin 20\% -What amount of inventory should be reported under U.S. GAAP?

The following information pertains to inventory held by a company at December 31, 2011. Historical cost \ 25,000 Replacement cost \ 20,000 Net realizable value \ 21,000 Normal profit Margin 20\% -What amount of inventory should be reported under IFRS?

Which topic was not covered by FASB under the 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)?

What are the six key FASB initiatives to further convergence?

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

What is the IOSCO?

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

Which of the following are not key FASB initiatives to further converge IFRS and U.S. GAAP?

The following information pertains to inventory held by a company on December 31, 2011. Historical cost \ 30,000 Replacement cost \ 20,000 Net realizable value \ 27,000 Normal profit margin 20\% -What amount of inventory should be reported under U.S. GAAP?

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, 2011. Historical cost \ 30,000 Replacement cost \ 20,000 Net realizable value \ 27,000 Normal profit margin 20\% -What amount of inventory should be reported under IFRS?

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 Flo

Consolidated Financial Statements - Ownership Patterns and Income

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 Operations

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 Standards

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

The following information pertains to inventory held by a company at December 31, 2011. Historical cost \ 25,000 Replacement cost \ 20,000 Net realizable value \ 21,000 Normal profit Margin 20\% -What amount of inventory should be reported under U.S. GAAP?

The following information pertains to inventory held by a company at December 31, 2011. Historical cost \ 25,000 Replacement cost \ 20,000 Net realizable value \ 21,000 Normal profit Margin 20\% -What amount of inventory should be reported under IFRS?

Which topic was not covered by FASB under the 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)?

What are the six key FASB initiatives to further convergence?

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

What is the IOSCO?

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

Which of the following are not key FASB initiatives to further converge IFRS and U.S. GAAP?

The following information pertains to inventory held by a company on December 31, 2011. Historical cost \ 30,000 Replacement cost \ 20,000 Net realizable value \ 27,000 Normal profit margin 20\% -What amount of inventory should be reported under U.S. GAAP?

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, 2011. Historical cost \ 30,000 Replacement cost \ 20,000 Net realizable value \ 27,000 Normal profit margin 20\% -What amount of inventory should be reported under IFRS?

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 Flo

Consolidated Financial Statements - Ownership Patterns and Income

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 Operations

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