Exam 15: Global Business and Accounting

"Convergence" means abandoning a country's financial reporting standards and replacing them with the International Financial Reporting Standards.

Assume the exchange rate for the Canadian dollar is rising relative to the U.S.dollar.An American company will incur losses from this rising exchange rate if it is making:

Hayden,Inc.purchased knobs from a Greek company for 185,000 euros.On the purchase date the exchange rate was $0.80 per euro,but when Hayden paid the liability,the exchange rate was $0.70 per euro.When this foreign account payable was paid,Hayden,Inc. ,recorded a:

Gains and losses from fluctuations in exchange rates should be shown on the:

Although cultural differences are significant in business dealings,they pose no difficulties to the design and implementation of an accounting system.

When the government uses central planning to allocate resources and to determine output among various segments of the economy,this is known as:

A contract giving the right to receive a specified quantity of foreign currency at a future date is known as a:

Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15,2017 with payment due in 60 days.Using the following exchange rates,what gain or loss from currency fluctuations should be recognized in 2017 and 2018,respectively? Nov.15,2017 $1.70 per British pound Dec.31,2017 $1.75 per British pound Jan.15,2018 $1.73 per British pound

Trente Switch and Signal sold equipment to a Canadian transportation company at a price of 300,000 Canadian dollars with payment due in 60 days.On the date of sale,the exchange rate was 1.50 Canadian dollars per U.S.dollar.Trente decided to hedge the risk of currency fluctuations by purchasing 300,000 Canadian dollars with payment due in 60 days.If the exchange rate in 60 days is 1.25 Canadian dollars per U.S.dollar,Trente Switch and Signal will:

Cultural traits in the United States include high uncertainty avoidance and a long-term orientation.

The consolidated financial statements of a U.S.-based corporation are expressed in U.S.dollars and conform to International Financial Reporting Standards.

An international joint venture involves the creation of a new company that is owned by two or more firms from different countries.

The Foreign Corrupt Practices Act (FCPA)imposes ________ for managers who engage in bribes.

Differences in accounting practices among countries reflect the different sources of capital in those countries.

An exchange rate represents the price of one currency stated in terms of another.

The Foreign Corrupt Practices Act distinguishes between influence peddling and facilitating payments.Facilitating payments are prohibited,while influence peddling is allowed.

All multinational companies must follow the standards issued by the International Accounting Standards Board.

Generally accepted accounting principles (GAAP)in the United States have been fully converged with International Financial Reporting Standards (IFRS).

Walblue imports a desk from a French manufacturer for sale in its chain of U.S.stores.The cost of a desk to Walblue is 3,700 euros (€).What is the dollar cost of one of these desks if the exchange rate is currently 1.117 euros per U.S.dollar? (Round to nearest cent. )

As foreign exchange rates fall,importers based in the United States will lose and exporters will gain.