1. Which of the following would make it permissible to use the average
exchange rate to translate income statement accounts rather than
translating each transaction separately?
Multiple select question.
When using the average exchange rate would result in a lower net
income for the period.
incorrect
When the income statement is comprised of many similar transactions
spread over a period.
incorrect
When translating each transaction separately would result in a lower
net income for the period.
When using the average exchange rate would not differ materially
from translating each transaction separately.
correct
Correct AnswerQuestion
When the income statement is comprised of many similar transactions
spread over a period.
When using the average exchange rate would not differ materially
from translating each transaction separately.
2. For a given translation exposure, the resulting translation adjustment
is equal to
Multiple choice question.
the translation exposure times the exchange rate in effect at the beginning
of the period.
the translation exposure times the average exchange rate for the period.
the translation exposure times the exchange rate in effect at the end of the
period.
incorrect
the translation exposure times the change in the exchange rate over the
period.
Correct AnswerQuestion
the translation exposure times the change in the exchange rate over the
period.
3. Which of the following are monetary assets?
Multiple select question.
Cash
correct
Accounts receivable
correct
Notes payable
incorrect
Reason:*
This is a monetary liability.
Notes receivable
incorrect
Accounts payable
Reason:*
This is a monetary liability.
Correct AnswerQuestion
Cash
Accounts receivable
Notes receivable
4. Which of the following are accurate regarding the recognition and de-
recognition of assets and liabilities with the temporal method?
Multiple select question.
All assets and liabilities are de-recognized using the current rate at the
time of de-recognition.
incorrect
New assets and liabilities are recognized using the average rate at the
time of the transaction.
incorrect
Nonmoneatry assets and liabilities are de-recognized based on the
historical exchange rate.
incorrect
Nonmonetary assets and liabilities are not revalued.
incorrect
Monetary assets and liabilities are revalued when the exchange rate
changes.
incorrect
Correct AnswerQuestion
Nonmoneatry assets and liabilities are de-recognized based on the
historical exchange rate.
Nonmonetary assets and liabilities are not revalued.
Monetary assets and liabilities are revalued when the exchange rate
changes.
5. Under U.S. GAAP,
Multiple select question.
the basis for segment disclosure is mandated.
summary financial information for each segment of a business must be
disclosed for public entities.
incorrect
the management approach is required for segment disclosure.
correct
summary financial information for each segment of a business must be
disclosed for private entities.
Correct AnswerQuestion
summary financial information for each segment of a business must be
disclosed for public entities.
the management approach is required for segment disclosure.
6. Which of the following are quantitative thresholds used to determine
whether an operating segment is reportable?
Multiple select question.
Liabilities are 10% or more of total segment liabilities.
Expenses are 10% or more of total revenue.
Revenue is 10% or more of total revenue.
correct
Common stock is 10% or more of total common stock.
Assets are 10% or more of total segment assets.
correct
Magnitude of operating profit or loss is 10% or more of profits or
losses.
incorrect
Correct AnswerQuestion
Revenue is 10% or more of total revenue.
Assets are 10% or more of total segment assets.
Magnitude of operating profit or loss is 10% or more of profits or
losses.
7. True or false: U.S. GAAP does not require disclosures related to
reportable segments.
True false question.
Trueincorrect
Reason:*
U.S. GAAP requires numerous disclosures related to reportable segments.
False
Correct AnswerQuestion
False
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