Question 1

All of the following statements are true regarding international legal systems except:

Accepted Answer

A)  The common law system has its roots in the United Kingdom. 
B)  In common law countries, there are generally fewer statutes written into the laws. 
C)  In code law countries, there is more reliance on interpretations by the courts than in common law countries. 
D)  Divergence in accounting standards is linked to differences in legal systems around the world.

Question 2

Summarize some of the common differences between U.S.GAAP and IFRS.

Accepted Answer

The answer of Summarize some of the common differences between...

Question 3

How would you describe the current role of the IASB in setting accounting standards?

Accepted Answer

The answer of How would you describe the current role...

Question 4

Regarding the valuation of operating assets, IFRS allows companies to use fair value.

Accepted Answer

A) True 
 B)False

Question 5

According to the text, in economies like those that made up the former Soviet Union, accounting standards are relatively less complex due to the fact that they are just beginning to be developed.

Accepted Answer

A) True 
 B)False

Question 6

Explain some of the differences in accounting for operating assets that exist between U.S.GAAP and IFRS.

Accepted Answer

The answer of Explain some of the differences in accounting...

Question 7

Which of the following is a commonly cited disadvantage of having a new unified set of accounting standards?

Accepted Answer

A)  Acquiring foreign companies would become a more confusing proposition. 
B)  Corporations may find themselves more susceptible to lawsuits due to the principles-based system. 
C)  Time and money would not be saved in accessing capital markets abroad. 
D)  The SEC would be dissolved if international accounting standards were adopted.

Question 8

On the reporting of liabilities where a range of values exists as a possible outcome, IFRS requires which of the following points to be recorded as a provision, if the outcome is probable?

Accepted Answer

A)  Low end of the range. 
B)  High end of the range. 
C)  Midpoint of the range. 
D)  IFRS presents no specific guidance as to this point.

Question 9

Which organization would have the ultimate responsibility of deciding if the advantages outweigh the disadvantages in the adoption of IFRS accounting standards in the U.S.?

Accepted Answer

A)  FASB 
B)  SEC 
C)  IASB 
D)  AICPA

Question 10

Both U.S.GAAP and IFRS apply the lower-of-cost-or market rule in a similar manner to inventory.

Accepted Answer

A) True 
 B)False

Question 11

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Contingent Liabilities in the U.S.is:

Accepted Answer

A)  Share Capital 
B)  Capital Reserves 
C)  Provisions for Other Risks 
D)  Deferred Income

Question 12

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Additional Paid-In Capital in the U.S.is:

Accepted Answer

A)  Share Capital 
B)  Capital Reserves 
C)  Provisions for Other Risks 
D)  Deferred Income

Question 13

In which of the following countries do significant differences exist between accounting income and taxable income?

Accepted Answer

A)  Japan 
B)  The United States 
C)  Germany 
D)  France

Question 14

During what year did the IASB and FASB reaffirm their commitment to achieving convergence of accounting standards in the U.S.?

Accepted Answer

A)  2009 
B)  2007 
C)  2002 
D)  2008

Question 15

Which of the following statements is true regarding common law?

Accepted Answer

A)  In common law countries, there are generally more statutes written into the laws. 
B)  In common law countries, there is less reliance on interpretation by the courts. 
C)  Because more details are written into U.S.law, FASB has shorter and more general accounting standards than most countries. 
D)  The common law system has its roots in the United Kingdom.

Question 16

All of the following are advantages available to companies if a single set of accounting standards were used except:

Accepted Answer

A)  A single set of worldwide accounting standards would have no effect on accounting fee costs. 
B)  A single set of standards would make it much easier to decide whether to acquire a foreign company. 
C)  A single set of worldwide accounting standards would facilitate comparisons for investment purposes. 
D)  A single set of worldwide accounting standards would make it easier to access foreign capital markets

Question 17

All of the following are among the most important reasons why accounting standards differ around the world except:

Accepted Answer

A)  differences in the state of economic development 
B)  differences in taxation 
C)  differences in inflation 
D)  differences in code law in all countries around the world

Question 18

Which of the following statements is false regarding U.S.GAAP versus IFRS financial statement presentation?

Accepted Answer

A)  U.S.GAAP does not require the presentation of a classified balance sheet. 
B)  IFRS requires the classification of assets and liabilities as current and noncurrent. 
C)  If a range of values is available for reporting an outcome in a loss contingency, U.S.GAAP requires a company to report the high end of the range as a probable outcome. 
D)  If a range of values is available for reporting an outcome in a loss contingency, IFRS requires a company to record the mid-point of the range as a probable outcome.

Question 19

When did the SEC drop its long-standing rule that required foreign companies that filed financial statements with it to adjust those statements to conform with U.S.GAAP and allow them to use IFRS?

Accepted Answer

A)  2001 
B)  2007 
C)  2009 
D)  2016

Question 20

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Capital Stock in the U.S.is:

Accepted Answer

A)  Share Capital 
B)  Capital Reserves 
C)  Provisions for other Risks 
D)  Deferred Income

Exam 14: Exploring Accounting Standards and Differences around the World

All of the following statements are true regarding international legal systems except:

Summarize some of the common differences between U.S.GAAP and IFRS.

How would you describe the current role of the IASB in setting accounting standards?

Regarding the valuation of operating assets, IFRS allows companies to use fair value.

According to the text, in economies like those that made up the former Soviet Union, accounting standards are relatively less complex due to the fact that they are just beginning to be developed.

Explain some of the differences in accounting for operating assets that exist between U.S.GAAP and IFRS.

Which of the following is a commonly cited disadvantage of having a new unified set of accounting standards?

On the reporting of liabilities where a range of values exists as a possible outcome, IFRS requires which of the following points to be recorded as a provision, if the outcome is probable?

Which organization would have the ultimate responsibility of deciding if the advantages outweigh the disadvantages in the adoption of IFRS accounting standards in the U.S.?

Both U.S.GAAP and IFRS apply the lower-of-cost-or market rule in a similar manner to inventory.

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Contingent Liabilities in the U.S.is:

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Additional Paid-In Capital in the U.S.is:

In which of the following countries do significant differences exist between accounting income and taxable income?

During what year did the IASB and FASB reaffirm their commitment to achieving convergence of accounting standards in the U.S.?

Which of the following statements is true regarding common law?

All of the following are advantages available to companies if a single set of accounting standards were used except:

All of the following are among the most important reasons why accounting standards differ around the world except:

Which of the following statements is false regarding U.S.GAAP versus IFRS financial statement presentation?

When did the SEC drop its long-standing rule that required foreign companies that filed financial statements with it to adjust those statements to conform with U.S.GAAP and allow them to use IFRS?

Significant differences exist in terms on financial statements around the world.For example, another name for what we know as Capital Stock in the U.S.is: