International Accounting Exercises 1 to 3 (A+ answers only)

International Accounting

Mastery Ex 1

Question 1 (1 point)

International accounting diversity can be found in terms of _______.

a	Terminology used in the financial statements
b	The amount of information disclosed in the financial statements
c	The order of items in the financial statements
d	All of the above are evidence of accounting diversity

Question 2 (1 point)

International accounting can be defined in terms of which the following levels?

a	Supranational organizations
b	Company
c	Country
d	All of the above

Question 3 (1 point)

Differences in legal systems used in various countries have been cited as one reason for diversity in accounting practice. What are the major types of legal systems?

a	Commercial law and accounting law
b	Rules and regulations
c	Written law and unwritten law
d	Common law and code law

Question 4 (1 point)

What is the term used to describe the possibility that a foreign currency will decrease in US $ value over the life of an asset such as Accounts Receivable?

a	Foreign exchange translation
b	Foreign exchange risk
c	Hedging
d	Foreign currency options

Question 5 (1 point)

Determination of net present value involves _______.

a	forecasting future profits and cash flows
b	discounting future cash flows back to their present value
c	analysis on an after-tax basis.
d	All of the above

Question 6 (1 point)

The factor used to convert from one country's currency to another country's currency is called the _______.

a	Interest rate
b	Cost of capital
c	Exchange rate
d	Strike price

Question 7 (1 point)

Countries such as the U.S. tend to value self-regulation of accounting. What term is used to define this subculture?

a	Uniformity
b	Flexibility
c	Conservatism
d	Professionalism

Question 8 (1 point)

Which of the following groups is a supranational organization?

a	United Nations
b	Organization for Economic Cooperation and Development
c	International Federation of Accountants
d	All of the above

Question 9 (1 point)

A cultural preference for loosely knit social fabric rather than tightly knit social fabric is referred to by the term _______.

a	Uncertainty avoidance
b	Masculinity
c	Individualism
d	Power distance

Question 10 (1 point)

What does "transparency" mean in accounting?

a	An emphasis on confidentiality
b	Restricted disclosure of accounting information
c	Flexibility in the application of accounting standards
d	Openness of accounting information

Mastery Exercise 2

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Question 1 (1 point)

Which of the following items should be included in the cost of property, plant, and equipment under IAS 16?

a	All costs directly attributable to getting the asset to the proper location
b	Import duties and taxes
c	Estimated costs of removing the asset
d	All of the above should be considered part of the cost of the asset.

Question 2 (1 point)

According to IAS 16, a decrease in the carrying amount of a fixed asset that is identified on an asset's first revaluation should be recorded as _______.

a	An expense on the income statement.
b	A prior period adjustment to retained earnings.
c	A credit to revaluation surplus.
d	A debit to revaluation surplus.

Question 3 (1 point)

Under IAS 36, Income Taxes, which of the following issues are covered?

a	Temporary differences
b	Operating loss carry-forwards
c	Tax credit carry-forwards
d	All of the above

Question 4 (1 point)

Which of the following inventory valuation methods commonly used in the U.S. is NOT allowed under IAS 2 (Inventories)?

a	LIFO
b	FIFO
c	Weighted average
d	Retail inventory method

Question 5 (1 point)

What types of issues cause differences between International Financial Reporting Standards and U.S. GAAP?

a	Measurement
b	Alternatives available
c	Disclosure
d	All of the above may be differences between IFRS and U.S. GAAP.

Question 6 (1 point)

Under U.S. GAAP, interest on loans secured to acquire fixed assets must be _______.

a	Expensed in the period they are incurred
b	Capitalized as part of the fixed asset cost
c	Either expensed currently or capitalized as part of the fixed asset cost
d	Charged against revenue in the year the asset is put into service

Question 7 (1 point)

Under IAS 19, Employee Benefits, which of the following benefits are covered?

a	Compensated absences and bonuses
b	Post-employment benefits
c	Deferred compensation and disability benefits
d	All of the above

Question 8 (1 point)

According to IAS 16 (property, plant & equipment), what is the term used to indicate the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction?

a	Replacement cost
b	Net realizable value
c	Fair market value
d	Historical cost

Question 9 (1 point)

How should the cost of borrowing funds to acquire or construct property, plant, and equipment be accounted for under IASB rules, as revised in 2007?

a	It should be expensed in the period incurred.
b	It should be added to the other costs of acquiring fixed assets to determine the amount for the balance sheet.
c	Both methods are acceptable.
d	Neither method is acceptable under IASB rules.

Question 10 (1 point)

A "bottom up" test and "top down" test must be applied under IASB standards to determine what?

a	Impairment of tangible fixed assets
b	Impairment of intangible fixed assets
c	Impairment of goodwill
d	Allocation of overhead costs

Mastery Exercise 3

Question 1 (1 point)

What is the reason given for a relatively low emphasis on public disclosure of financial information in Japan?

a	Significant reliance on bank credit for financing
b	Long-term cross-corporate ownership of stock
c	Income is not viewed as a measure of corporate performance.
d	All of the above

Question 2 (1 point)

What is the primary source of capital in Germany?

a	Issuance of stock
b	Corporate bonds
c	Bank loans
d	Government grants

Question 3 (1 point)

Among the world's nations, where does the People's Republic of China rank in terms of receiving foreign direct investment?

a	First
b	Fourth
c	Fifth
d	Tenth

Question 4 (1 point)

By what title are professional accountants in Mexico known?

a	Certified Public Accountant (CPA)
b	Chartered Accountant (CA)
c	Contador Publico Certificado (CPC)
d	Mexican Certified Public Accountant (MCPA)

Question 5 (1 point)

The Japanese economy is dominated by "keiretsu." What are these?

a	warlords that control Japanese wealth
b	local governmental entities
c	corporate conglomerates
d	joint ventures with foreign investors

Question 6 (1 point)

What is the basis for the People's Republic of China's current economic system?

a	Government ownership of all businesses and economic resources
b	Private ownership of all business enterprises
c	Competition between state-owned enterprises and private business
d	Congressional planning of industrial output and consumption

Question 7 (1 point)

What functional area dominates the accounting profession in Germany?

a	Taxation
b	Auditing
c	Financial reporting
d	Managerial Accounting

Question 8 (1 point)

What term should be used to describe the current economic system in the People's Republic of China?

a	Communist
b	Socialist market
c	Totalitarian
d	Free enterprise

Question 9 (1 point)

Which body has the primary responsibility for establishing accounting standards in Japan?

a	Japanese Institute of Certified Public Accountants (JICPA)
b	Japanese Accounting Association (JAA)
c	Japan's Ministry of Finance (MoF)
d	International Accounting Standards Board (IASB)

Question 10 (1 point)

In Germany, prudence is an accounting principle established in commercial law. What does "prudence" mean in an accounting context?

a	Reliability
b	Comparability
c	Conservatism
d	Relevance

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