Question 1

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 2

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.
-What amount should be recognized as a gain in 2011 using IFRS?

Accepted Answer

A)  $20,000. 
B)  $50,000. 
C)  $100,000. 
D)  $150,000. 
E)  $200,000. Under IRFS the entire gain is recognized in 2011. 
A)  $20,000. 
B)  $50,000. 
C)  $100,000. 
D)  $150,000. 
E)  $200,000. Under IRFS the entire gain is recognized in 2011.

Question 3

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } 
\text { Historical cost } & \$ 30,000 \
\text { Replacement cost } & \$ 20,000 \
\text { Net realizable value } & \$ 27,000 \
\text { Normal profit margin } & 20 \%
\end{array}$$
-As a result of inventory loss, what is the difference in income between reporting using U.S. GAAP and IFRS?

Accepted Answer

A)  U.S. GAAP income is $3,000 higher. 
B)  U.S. GAAP income is $10,000 lower. 
C)  IFRS income is $8,400 higher. 
D)  IFRS income is $3,000 lower. 
E)  IFRS income is $5,400 higher. U.S. GAAP loss is $8,400 and IFRS loss is $3,000 resulting in IFRS income being $5,400 higher. 
A)  U.S. GAAP income is $3,000 higher. 
B)  U.S. GAAP income is $10,000 lower. 
C)  IFRS income is $8,400 higher. 
D)  IFRS income is $3,000 lower. 
E)  IFRS income is $5,400 higher. U.S. GAAP loss is $8,400 and IFRS loss is $3,000 resulting in IFRS income being $5,400 higher.

Question 4

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

Accepted Answer

Common law, which relies on a limited am

Question 5

What is meant by harmonization of accounting standards?

Accepted Answer

Harmonization is the process of reducing

Question 6

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

Accepted Answer

Recognition differences relate to whethe

Question 7

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 the above 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 the above are ways a country can use IFRS.

Question 8

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 9

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.
-What amount should be recognized in 2011 as a gain on the sale using U.S. GAAP?

Accepted Answer

A)  $20,000. 
B)  $50,000. 
C)  $100,000. 
D)  $150,000. 
E)  $200,000. Under U.S. GAAP the gain is recognized over the life of the lease. The gain for 2011 is 100,000/5= 20,000. 
A)  $20,000. 
B)  $50,000. 
C)  $100,000. 
D)  $150,000. 
E)  $200,000. Under U.S. GAAP the gain is recognized over the life of the lease. The gain for 2011 is 100,000/5= 20,000.

Question 10

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 U.S. GAAP?

Accepted Answer

A)  $160,000 
B)  $150,000 
C)  $146,000 
D)  $140,000 
E)  $116,000 Under U.S. GAAP the company would report equipment at its book value. Straight-line depreciation is (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 U.S. GAAP the company would report equipment at its book value. Straight-line depreciation is (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 11

What problems are caused by diverse accounting practices?

Accepted Answer

(1) Difficulty in preparation of consoli

Question 12

Which of the following is not a factor influencing a country's financial reporting practices?

Accepted Answer

A)  Providers of financing. 
B)  Inflation. 
C)  Legal system. 
D)  Gross National Product. 
E)  Political and economic ties. 
A)  Providers of financing. 
B)  Inflation. 
C)  Legal system. 
D)  Gross National Product. 
E)  Political and economic ties.

Question 13

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 14

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.
-What amount should be recognized as research and development expense in 2011 using IFRS?

Accepted Answer

A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000. Under IAS 38, $150,000 would be expensed and $50,000 of development costs would be capitalized as an intangible asset. 
A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000. Under IAS 38, $150,000 would be expensed and $50,000 of development costs would be capitalized as an intangible asset.

Question 15

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

Accepted Answer

The topics covered under the s

Question 16

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 17

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

Accepted Answer

They allowed at leas

Question 18

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 19

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.
-What amount should be recognized as research and development expense in 2011 using U.S. GAAP?

Accepted Answer

A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000. Under U.S. GAAP all R&D is expensed. 
A)  $50,000. 
B)  $150,000. 
C)  $200,000. 
D)  $0. 
E)  $250,000. Under U.S. GAAP all R&D is expensed.

Question 20

The IASB and FASB are working on several joint projects. What is the purpose of the Financial Statement Presentation 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.

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

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

What is meant by harmonization of accounting standards?

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

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

Which of the following is not true about IFRS?

What problems are caused by diverse accounting practices?

Which of the following is not a factor influencing a country's financial reporting practices?

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

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

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?

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

The IASB and FASB are working on several joint projects. What is the purpose of the Financial Statement Presentation 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 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

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

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

What is meant by harmonization of accounting standards?

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

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

Which of the following is not true about IFRS?

What problems are caused by diverse accounting practices?

Which of the following is not a factor influencing a country's financial reporting practices?

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

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

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?

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

The IASB and FASB are working on several joint projects. What is the purpose of the Financial Statement Presentation 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 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