International Accounting Exam
Answer Key
Course Introduction
International Accounting examines the principles, standards, and practices of accounting in a global context. It explores the diversity of accounting regulations worldwide, focusing on the comparative analysis of International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). The course covers topics such as foreign currency transactions, international financial statement analysis, consolidation of multinational companies, and the impact of economic, cultural, and political environments on accounting systems. Students will also gain insight into the challenges of harmonizing accounting standards and the implications for multinational corporations, investors, and regulatory bodies.
Recommended Textbook
Advanced Accounting 12th Edition by Paul
M. Fischer
Available Study Resources on Quizplus
24 Chapters
1159 Verified Questions
1159 Flashcards
Source URL: https://quizplus.com/study-set/3584
Page 2
Chapter 1: Business Combinations: New Rules for a
Long-Standing Business Practice
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/71172
Sample Questions
Q1) Which of the following costs of a business combination can be deducted from the value assigned to paid-in capital in excess of par?
A)Direct and indirect acquisition costs.
B)Direct acquisition costs.
C)Direct acquisition costs and stock issue costs if stock is issued as consideration.
D)Stock issue costs if stock is issued as consideration.
Answer: D
Q2) When determining the fair values of assets acquired in an acquisition, the highest level of measurement per GAAP is
A)adjusted market value based on prices of similar assets.
B)unadjusted market values in an actively traded market.
C)based on discounted cash flows.
D)the entity's best estimate of an exit or sale value.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Consolidated Statements: Date of Acquisition
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/71171
Sample Questions
Q1) Pagach Company purchased 100% of the voting common stock of Rage Company for $1,800,000.The following book and fair values are available: \(\begin{array}{lrr}
& \text { Book Value } & \text { Fair Value } \\
\text { Current assets } & \$ 150,000 & \$ 300,000 \\
\text { Land and building } & 280,000 & 280,000 \\
\text { Machinery } & 400,000 & 700,000 \\
\text { Bonds payable } & (300,000) & (250,000) \\ \text { Goodwill } & 150,000 & ? \end{array}\)
The bonds payable will appear on the consolidated balance sheet
A)at $300,000 (with no premium or discount shown).
B)at $300,000 less a discount of $50,000.
C)at $0; assets are recorded net of liabilities.
D)at an amount less than $250,000 since it is a bargain purchase.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Consolidated Statements: Subsequent to Acquisition
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/71170
Sample Questions
Q1) If in the consolidation process the investment in subsidiary account is increased or decreased by the amount determined by the following calculation: \[\text { (Parent ownership percentage } ) \times ( \text { Current balance in subsidiary retained eamings minus the subsidiary's retained eamings balance on the date of acquisition } )\] the investment account is being converted from
A)cost to simple equity.
B)cost to sophisticated equity.
C)simple equity to sophisticated equity.
D)simple equity to cost.
Answer: A
Q2) The method of accounting for subsidiaries that is required for influential investments is the
A)cost method.
B)simple equity method.
C)investment method.
D)sophisticated equity method.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Intercompany Transactions: Merchandise, Plant
Assets, and Notes
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/71169
Sample Questions
Q1) During 2018, a parent company billed its 100%-owned subsidiary for computer services at the rate of $1,000 per month.At year end, one month's bill remained unpaid.As a part of the consolidation process, net income
A)should be reduced $12,000.
B)should be reduced $1,000.
C)needs no adjustment.
D)needs an adjustment, but the amount is not provided by this information.
Q2) The sale of inventory items by a parent company to an affiliated company
A)enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining.
B)affects consolidated net income under a periodic inventory system but not under a perpetual inventory system.
C)does not result in consolidated income until the merchandise is sold to outside entities.
D)does not require a working paper adjustment if the merchandise was transferred at cost.
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Intercompany Transactions: Bonds and Leases
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/71168
Sample Questions
Q1) In years subsequent to the year one member of a consolidated group purchases another member's outstanding bonds from outside parties, Consolidated Income Statements:
A)recognize a prorated share of any gain or loss from intercompany bonds.
B)recognize a prorated share of any gain but would not show a share of a loss from intercompany bonds.
C)recognize a prorated share of any loss but would not show a share of a gain from intercompany bonds.
D)would not recognize any gain or loss from intercompany bonds.
Q2) Powell Company owns an 80% interest in Sauter, Inc.On January 1, 2016, Sauter issued $400,000 of 10-year, 12% bonds at a premium of $50,000.On December 31, 2021, 5 years after original issuance, Powell purchased all of the outstanding bonds for $390,000.Both firms use the straight-line method of amortization. What is the gain on retirement on the 2021 consolidated income statement?
A)$12,500
B)$22,500
C)$10,000
D)$35,000
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Cash Flow, Eps, and Taxation
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/71167
Sample Questions
Q1) Company P purchased an 80% interest in Company S on January 1, 2016, for $800,000.On the purchase date, Company S stockholders' equity was $800,000.Any excess of fair value over book value was attributed to a patent with a 10-year remaining life.In 2016, Company P reported internally generated net income before taxes of $150,000.Company S reported a net income before taxes of $70,000.The firms file a consolidated tax return at a 30% tax rate.The consolidated net income is
A)$142,800
B)$121,800
C)$138,800
D)$152,000
Q2) When the acquisition of a subsidiary occurs during a reporting period, the computation of both Basic earnings per share (BEPS) and Diluted earnings per share (DEPS) includes subsidiary income
A)and subsidiary securities for the entire period.
B)for the entire period and the number of subsidiary shares weighted for the partial period.
C)for the partial period and the number of subsidiary shares weighted for the partial period
D)for the partial period and the number of subsidiary shares entire period
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Special Issues in Accounting for an Investment
in a Subsidiary
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/71166
Sample Questions
Q1) Pine Company purchased a 60% interest in the Scent Company on January 1, 2016 for $360,000.On that date, the stockholders' equity of Scent Company was $450,000.Any excess cost on 1/1/16 was attributable to goodwill.Pine purchased another 20% interest on January 1, 2019 for $200,000.On January 1, 2019, Scent Company's stockholders' equity was $700,000, the entire increase due to retained earnings.The goodwill balance on the December 31, 2019, balance sheet is ____.
A)$100,000
B)$60,000
C)$0
D)$150,000
Q2) Control of a subsidiary was achieved with the initial investment in subsidiary stock.When a subsequent block of subsidiary's stock is purchased
A)the parent must change from the cost method to the equity method.
B)the parent must change from the equity method to the cost method.
C)no change in accounting methods is required.
D)none of the above.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Subsidiary Equity Transactions, Indirect
Subsidiary Ownership, and Subsidiary Ownership of Parent Shares
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/71165
Sample Questions
Q1) Plum Inc.acquired 90% of the capital stock of Sterling Co.on 1/1/16 at a cost of $540,000.On this date Sterling had equipment (10-year life) carried at $200,000 under market and total equity amounting to $350,000.
On 1/1/16 Sterling acquired 5% (10,000 shares) of Plum's outstanding common stock for $3 per share.Internally generated net income was $50,000 for Plum and $40,000 for Sterling. Consolidated net income for 2017 is
A)$90,000
B)$86,000
C)$83,500
D)$70,000
Q2) Manke Company owns a 90% interest in Neske Company.Neske, in turn, owns a 10% interest in Manke.Neske has 10,000 common stock shares outstanding, and Manke has 20,000 common stock shares outstanding.How many shares would each firm show as outstanding in the consolidated balance sheet, under the treasury stock method?
A)Manke, 20,000
B)Manke, 20,000; Neske, 1,000
C)Manke, 18,000; Neske, 1,000
D)Manke, 18,000
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: The International Accounting Environment
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/71164
Sample Questions
Q1) The process of expressing a subsidiary's financial statement amounts denominated in a foreign currency into amounts measured in the reporting currency of its parent company is referred to as:
A)redenomination of financial statements.
B)foreign currency translation.
C)currency consolidation.
D)foreign currency transaction.
Q2) Forward Contracts:
Calculate the gain or loss to the holder and to the writer of the forward contract who agrees to buy foreign currencies at a specific price.Assume that on May 1, the writer of the forward contract agrees to sell 3,000,000 foreign currencies at a specific price of $0.22 per foreign currency (FC) with delivery in 30 days (May 31).Assume the spot rate at the end of the forward period is $0.20.
What is the entry to the holder on May 1.
Explain how the value of the forward contract changes over time.
Q3) Explain the factors which have led to the differences in accounting standards among nations.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Foreign Currency Transactions
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/71163
Sample Questions
Q1) Larson, Inc.sold merchandise for 600,000 FC to a foreign vendor on November 30, 2020.Payment in foreign currency is due January 31, 2021.On the same day, Larson signed an agreement with a foreign exchange broker to sell 600,000 FC on January 31, 2021.Exchange rates to purchase 1 FC are as follows: ?
\[\begin{array} { l r r r } & \text { Nov. } 30,2020 & \text { Dec. } 31,2020 & \text { Jan. } 31,2021 \\
\text { Spot } & \$ 1.49 & \$ 1.46 & \$ 1.43 \\
30 \text { day } & \$ 1.48 & \$ 1.43 & \$ 1.44 \\
60 \text { day } & \$ 1.47 & \$ 1.40 & \$ 1.42
\end{array}\] What will be the recorded amount of the Forward Contract on November 30, 2020?
A)$894,000
B)$888,000
C)$882,000
D)$0
Q2) Differentiate between the following monetary systems: floating system, controlled float system and tiered system.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Translation of Foreign Financial Statements
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/71162
Sample Questions
Q1) Which of the following best describes the measurement of a gain or loss from the sale of a depreciable asset by a foreign subsidiary whose functional currency is not the local currency?
A)Reconstruct the journal entry on the date of the sale using the historical rate for cash and the depreciable asset and its accumulated depreciation.
B)Reconstruct the journal entry on the date of the sale using the current rate for cash and the historical rate for the depreciable asset and its accumulated depreciation.
C)Translate the gain or loss using the historical rate.
D)Translate gains at the current rate and losses at the historical rate.
Q2) When an U.S.investor entity acquires interest in a foreign entity with the payment of foreign currency, the determination of excess is calculated
A)in dollars
B)in the foreign currency
C)in dollars if re-measurere-measurement (historical rate/temporal method) is indicated
D)in the foreign currency if translation (current rate/functional method) is indicated
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Interim Reporting and Disclosures About
Segments of an Enterprise
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/71161
Sample Questions
Q1) Allee Co.has pretax, ordinary income of $7,000 and $38,000 in the first and second quarters, respectively.The projected ordinary income for the third and fourth quarters is $60,000 and $30,000.Occurring in the second quarter is a pretax, non-ordinary loss of $50,000 and pretax non-ordinary income of $35,000.The statutory tax rate is 15% on the first $50,000, 22% on the next $50,000, and 28% on income over $100,000.
Required:
Determine the tax impact traceable to the non-ordinary income and non-ordinary loss.
Q2) Non-ordinary items resulting in income or loss
A)include unusual but not infrequent gains.
B)are treated the same as ordinary items when calculating the effective tax rate.
C)are always treated as a total group when calculating the effective rate for the quarter.
D)are always excluded from interim reporting.
Q3) Discuss the criteria emphasized in the "management approach" that is used to define operating segments.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Partnerships: Characteristics, Formation, and
Accounting for Activities
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/71160
Sample Questions
Q1) D & E.share profits and loss in an agreed ratio of 5/7.With a net income of $85,000 E's share of net income would be:
A)$42,500
B)$49,583
C)$60,714
D)$45,000
Q2) A & B formed a partnership on January 1 Partners A and B withdraw cash of $800 and $1,500, respectively.Drawings in excess of $1,000 are viewed as excessive withdrawals and are charged against capital.What is the logical entry?
A)Debit to Drawing Partner A for $800, Debit to Drawing partner B $1,500
B)Debit to Capital Partner A for $800, Debit to Drawing Partner B for $1,500
C)Debit to Capital Partner A for $800, Debit to Capital Partners B for $1,500
D)Debit to Drawing Partner A for $800, Debit to Capital Partner B for $1,500
Q3) T & U form a partnership with initial investments of $100,000 and $200,000 respectively.Their agreement calls for a salary to T of $40,000 and a salary to U for $60,000.Each partner is to receive interest of 10% on their initial investment and they agree the remaining profit or loss is to be divided equally.If the net income for the period is $230,000 show the distribution to each partner:
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Partnerships: Ownership Changes and Liquidations
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/71173
Sample Questions
Q1) Recording a write down from an original partner's capital of book value to its implied fair market value would involve a debit to which account:
A)Cash
B)Revenue
C)Expense
D)Capital
Q2) In the BONUS method of partnership recognition existing book values should be:
A)Adjusted to current values
B)Not adjusted to current values
C)Left alone
D)Recorded at a price greater than book value
Q3) When an incoming partner's contribution is different from that indicated by the book values of the original partnership, the admission of the partner, which method may be used to record the admission:
A)RUPA
B)Straight Line
C)Acceptance
D)Goodwill
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Government and Not for Profit Accounting
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/71159
Sample Questions
Q1) Assume a budget for City has been approved and the following information is available:
Estimated inflow from revenue $900,000
Estimated inflow from general long term debt $100,000
Transfer from other funds $250,000
Sales of fixed Assets $300,000
Estimated outflows expenditures$1,200,000
Transfer to other funds $ 370,000
Record the above events in a general journal
Q2) What type of entries would close the budgetary and actual accounts?
A)Budgetary
B)Operating
C)Nominal
D)Closing
Q3) Which fund has no restriction and is available for operational expense:
A)Fiduciary Fund
B)General Fund
C)Proprietary funds
D)Payment Funds
Q4) Identify the three fund types used in government accounting and their relevance:
Page 17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Governmental Accounting: Other
Governmental Funds, Proprietary Funds, and Fiduciary Funds
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/71158
Sample Questions
Q1) Which of the following is not a classification of net assets of proprietary funds?
A)Unrestricted
B)Restricted
C)Assigned
D)Invested in capital assets, net of related debt
Q2) The City of Newport operates its own solid waste landfill and charges fees to users who dump solid waste in the landfill.When should estimated costs for closure and post-closure care be accounted for?
Q3) Which of the following fund types have accounting principles most closely related to those of the General Fund?
A)Pension Trust
B)Enterprise
C)Agency
D)Special Revenues
Q4) What is escheat property and how do we account for it?
Q5) The financial statements of fiduciary funds include Fund Balances, and Net Assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Financial Reporting Issues
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/71157
Sample Questions
Q1) General fixed assets, including infrastructure assets, and general long-term debt are included only in the government-wide financial statements.
A)True
B)False
Q2) Under the requirements for a Statement of Cash Flow, what sections must be included in the statement?
1) Operating cash flows
2) Cash Flows from noncapital financing
3) Capital and related financing cash flows
4) Investing cash flows
A)1, 2, 4, and interfund transfers in
B)1, 2, 3, 4
C)-2, 3, 4, and cash receipts from taxes
D)1, 2, 3, and cash receipts from taxes
Q3) Required supplementary information includes pension-related information, but not a budgetary comparison or schedule.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Accounting for Private Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/71156
Sample Questions
Q1) A major corporation makes a donation of $10,000,000 to the local art museum foundation for the construction of a new art museum provided the community can match the $10,000,000 with other donations.This is an example of a(n):
A)Unconditional Pledge
B)Unrestricted Contribution
C)Conditional Pledge
D)Endowment
Q2) For Agency Funds, assets are recorded as liabilities when received, and only recorded as income in the appropriate fund when release by the contributor.
A)True
B)False
Q3) Describe the circumstances that must be true in order for donated, personal services to be recorded as revenue (contributions) in a not-for-profit organization.
Q4) A not-for-profit organization does not issue an income statement.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/71155
Sample Questions
Q1) Which university fund is most similar to the governmental general fund?
A)Agency
B)Annuity and Life income
C)Current unrestricted
D)Loan
Q2) Atlee makes a cash gift to a not-for-profit hospital which is restricted by the donor to buy toys for the pediatric ward.It should be recorded in the:
A)General Fund.
B)Specific-Purpose Fund.
C)Endowment Fund.
D)Enterprise Fund.
Q3) Under the DRG system, all potential diagnoses are classified into a number of meaningful groups, each of which has a different value.Each hospital in a specific geographical region receives the same amount for each DRG.
A)True
B)False
Q4) How has the adoption of GASB Statement No.35 changed the reporting standards for colleges and universities.
Q5) Are not-for-profit universities required to use fund accounting?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Estates and Trusts: Their Nature and the
Accountants Role
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/71154
Sample Questions
Q1) The primary purpose of an estate's charge and discharge statement is to detail A)cash flow as to principal and as to income.
B)income and expenses of the estate.
C)transactions affecting principal and income.
D)the profit or loss during the period of stewardship.
Q2) In a testate distribution, a gift of property left after all other legacies have been assigned is referred to as a A)general legacy.
B)demonstrative legacy.
C)residuary legacy.
D)specific legacy.
Q3) Adequate estate planning is critical for an individual or family with a sizable net worth.List the goals of estate planning for large, more complex estates.
Q4) The beneficiary is taxed on a portion of taxable income that he or she received, and the estate, as a separate entity, is taxed on a pro rata income share that it accumulates. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Debt Restructuring, Corporate Reorganizations, and Liquidations
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/71153
Sample Questions
Q1) Land and buildings having a book value of $150,000 and a fair value of $185,000 are transferred to a creditor in a troubled debt restructuring to fully settle a loan of $200,000 plus accrued interest of $3,000.What is the amount of the gain on restructuring?
A)$35,000
B)$53,000
C)$15,000
D)$18,000
Q2) Describe the duties of the trustee in a Chapter 7 liquidation.
Q3) The dividend to general unsecured creditors is not a return of equity to shareholders, but the ratio of the net proceeds available to unsecured creditors without priority divided by the total claims of unsecured creditors without priority.
A)True
B)False
Q4) Fresh-start accounting must be adopted by certain debtors emerging from chapter 11 bankruptcy.
1) When is fresh start accounting required?
2) What are some of the characteristics of fresh-start accounting?
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Derivatives and Related Accounting Issues
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/71152
Sample Questions
Q1) An advantage of a fair value hedge is that:
A)gains or losses on the derivative hedging instrument and the offsetting gains or losses on the hedged items are both recognized currently in earnings.
B)gains or losses on hedges of firm commitments are reported in other comprehensive income because the anticipated cash flows have not been recognized in earnings.
C)documentation is not necessary for fair value hedges.
D)a bank may use a fair value hedge to hedge the risk that a customer's loan will be prepaid.
Q2) The FASB requires entities that hold or issue derivative instruments that are designated and qualify as hedging instruments to disclose information that allows users to understand how and why the reporting entity uses derivative instruments.
A)True
B)False
Q3) Explain how a derivative instrument may be used to reduce or avoid the exposure to risk associated with other transactions.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 23: Equity Method for Unconsolidated Investments
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/71151
Sample Questions
Q1) Land is depreciated typically on a ten-year life.
A)True
B)False
Q2) On January 1, 20X1, Company P purchased a 30% interest in the Company S for $345,000.At that time, Company S had stockholders' equity of $1,000,000.Any excess cost over book value was attributed to a patent with a 15-year life.During 20X1, Company S earned $60,000 and paid dividends of $15,000.What is the balance in the investment account on December 31, 20X1, using the sophisticated equity method?
A)$363,000
B)$360,000
C)$355,500
D)$349,500
Q3) The market value of an investment is not a required disclosure for equity method investors.
A)True
B)False
Q4) Under the equity method, the investor's share of earnings is reported as income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Variable Interest Entities
Available Study Resources on Quizplus for this Chatper
10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/71150
Sample Questions
Q1) The accounts of the VIE are adjusted to fair value on the date control is achieved.
A)True
B)False
Q2) In a VIE, the majority of losses or income ow to the primary bene ciaries, not the residual interest shareholders shareholder.The distribution of income is not based on common stock ownership.Instead, it is based on contractual agreements that could include interest on loans, management fees or a de ned percentage of revenue or income.
A)True
B)False
Q3) The primary beneficiary does not consolidate its interest in a VIE into their consolidated financial statements.
A)True B)False
Q4) Consolidation procedures are applied to controlling ownership interests in Variable Interest Entities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
26