International Accounting Test Bank
Course Introduction
International Accounting explores the principles and practices of accounting in a global context, examining how varying financial reporting standards and regulations impact multinational organizations. The course covers topics such as the International Financial Reporting Standards (IFRS), comparative analysis of different national accounting systems, currency translation, consolidation of foreign operations, and the challenges of international financial statement analysis. Students will gain insight into the complexities of global business environments and develop the skills to interpret and prepare financial statements for organizations operating across borders.
Recommended Textbook
International Accounting and Multinational Enterprises 6th Edition by Lee H. Radebaugh
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16 Chapters
693 Verified Questions
693 Flashcards
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Page 2
Chapter 1: International Accounting and International Business
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37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/72062
Sample Questions
Q1) How do societal values and accounting values interact with each other to establish accounting systems?
A) Accounting values indirectly affect accounting systems through their impact on institutional consequences
B) Societal values affect accounting values, and accounting values also modify societal values.
C) Accounting systems are influenced directly by societal values.
D) Accounting systems are indirectly influenced by societal values through their impact on accounting values and institutional consequences (such as legal systems, capital markets, etc.)
Answer: D
Q2) Double entry bookkeeping quickly had world-wide acceptance, as the British accepted it in the 1400s.
A)True
B)False
Answer: False
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Page 3
Chapter 2: International Accounting Patterns, Culture and Development
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42 Verified Questions
42 Flashcards
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Sample Questions
Q1) According to the inductive approach to accounting classification, A) accounting practices are analyzed and used to develop accounting groups.
B) international accounting groups are developed by linking environmental factors to national practices.
C) it is impossible to compare countries due to political differences.
D) Mueller classifies accounting systems into the following patterns: macroeconomic, microeconomic, independent discipline, and uniform accounting.
Answer: A
Q2) Weak uncertainty avoidance as a cultural value implies that A) people have a preference for a loosely knit social framework in society.
B) people accept a hierarchical order.
C) people strive for power equalization and demand justification for power inequities.
D) people maintain a relaxed atmosphere in which practice counts more than principles and deviance is more easily tolerated.
Answer: D
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Chapter 3: Comparative International Financial Accounting
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35 Verified Questions
35 Flashcards
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Sample Questions
Q1) To which country can the origins of double-entry bookkeeping be traced?
A) Greece
B) Netherlands
C) United Kingdom
D) Italy
Answer: D
Q2) Which of the following accurately reflects French accounting?
A) Due to their strong Latin cultural tradition, the French tend to be more judgmental than legalistic.
B) According to the authority and enforcement scales in Gray's model, the French would lean to flexibility and professionalism.
C) According to the measurement and disclosure scales in Gray's model, the French would lean to secrecy and conservatism.
D) The true and fair view of the 4th Directive was already a part of French tradition. Answer: C
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Chapter 4: Comparative International Financial Accounting
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Information disclosure is constrained in developing countries where:
A) shareholders are the most important user group.
B) taxation rules influence amounts.
C) companies are financed mainly by banks, family members and government agencies.
D) the accounting profession is not well developed.
Q2) In Russia, accounting regulations are generally created by?
A) Private sector accountants.
B) Security Exchange (SET)
C) Ministry of Finance.
D) IASC.
Q3) The Indian accounting system has its origins in the
A) Napoleanic code law
B) Germanic
C) British
D) American
Q4) Poland made a transition to a market-oriented economy using a shock therapy treatment.
A)True
B)False
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Chapter 5: International Financial Statement Analysis
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35 Verified Questions
35 Flashcards
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Sample Questions
Q1) Historical cost is frequently modified by revaluations in
A) the United States.
B) the Asian countries.
C) the United Kingdom and the Netherlands.
D) Germany.
Q2) Continental Europe has relatively less conservative accounting because of a strong influence of taxes.
A)True
B)False
Q3) Earnings tend to be more conservative or understated in France and Germany than in the united Kingdom.
A)True
B)False
Q4) Currently, international standards
A) are developed to allow substantial flexibility
B) promote uniformity
C) are designed to reduce transparency
D) are developed by the IDOT
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Chapter 6: International Transparency and Disclosure
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Sample Questions
Q1) Because of the Internet, transparency has become less important over time.
A)True
B)False
Q2) The increased supply of financial information by MNEs appears to have
A) satisfied labor unions but not governments.
B) resulted in more precise disclosure requirements by governments.
C) resulted in the demand for additional information.
D) resulted in a greater simplification in financial statements.
Q3) The direct costs of disclosure involve the
A) threat of takeover or merger.
B) cost of data collection and processing.
C) possibility of intervention by government agencies.
D) possibility of claims from political or consumer groups.
E) all of the above.
Q4) Which of the following are considered by managers to generate the greatest cost of competitive disadvantage?
A) line of business profits, narrowly defined.
B) inflation adjusted profits.
C) a description of organizational structure.
D) quarterly interim financial statements.
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Chapter 7: International Accounting Standards and Global Convergence
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37 Verified Questions
37 Flashcards
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Sample Questions
Q1) The European Union and the Organization for Economic Cooperation and Development differ from each other in terms of their accounting harmonization efforts, because
A) the OECD represents primarily developing countries, whereas the EU represents industrial countries.
B) the EU has the force of law behind it, whereas the OECD can only recommend disclosure practices.
C) the EU is involved only in measurement, whereas the OECD is only interested in disclosure.
D) the OECD represents the profession, whereas the EU represents governments.
Q2) Pressures for harmonization of international accounting as means to achieve comparability are growing.
A)True
B)False
Q3) The Vredeling proposals called for the regular provision of information about MNE subsidiaries.
A)True
B)False
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Chapter 8: International Business Combinations, Goodwill and Intangibles
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60 Verified Questions
60 Flashcards
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Sample Questions
Q1) International and US accounting standards recommend the indirect method of cash flow statements.
A)True
B)False
Q2) Where pooling-of-interest accounting is used
A) accounts must be adjusted to fair value after the merger
B) there is no goodwill
C) the companies have no comparative earnings advantages over companies that use purchase accounting
D) goodwill must be examined annually for impairment
Q3) The advantage of setting up brands as an asset without amortization is that
A) brand names have value and are being maintained through advertising.
B) it is relatively easy to assess the future value of well-known brands.
C) it is consistent with accrual accounting.
D) it is the most conservative approach to accounting for brands.
Q4) The equity method is used,
A) by a most all of the corporations worldwide.
B) by Japanese, U.S. and United Kingdom companies.
C) only if proportional consolidation will result in different income.
D) by Germany and Switzerland.
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Chapter 9: International Segment Reporting
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40 Verified Questions
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Sample Questions
Q1) Excessive costs of segmental disclosure has doubtful validity.
A)True
B)False
Q2) US GAAP's latest SFAS131 is very similar to IASB's revised IAS 14
A)True
B)False
Q3) A problem with segment disclosure is that
A) IAS 14 has been rejected by MNEs
B) there are too many segments
C) segment reporting is only within the UK scope of the audit
D) management will be disclosing its own view of segments with significant differences in risk and return
Q4) A major argument against segment disclosure is that
A) gross margins will fall
B) transfer pricing activity will increase
C) in some cases it may be misleading
D) MNEs will have to do more mergers
Q5) Segment identification is very easy in practice.
A)True
B)False
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Chapter 10: Foreign Currency Transactions and Translation
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55 Verified Questions
55 Flashcards
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Sample
Questions
Q1) According to FASB Statement No. 52, which of the following does not have to be disclosed?
A) The aggregate transaction gain or loss included in income.
B) The beginning and ending amount of cumulative translation adjustments.
C) The average exchange rate movement of countries whose operations are material to the parent company's results.
D) The aggregate adjustment for the period resulting from translation adjustments.
Q2) According to which method is the foreign currency translation gain or loss taken to stockholders' equity?
A) the current rate method
B) the consolidation method
C) the temporal method
D) the conversion method
Q3) What is the dollar value of the sale as carried on the books on June 30?
A) $120,750
B) $120,000
C) $119,625
D) $121,500
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Chapter 11: International Accounting for Price Changes
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42 Verified Questions
42 Flashcards
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Sample Questions
Q1) Current value accounting
A) is required for Dutch companies.
B) takes into consideration that the prices of specific assets have changed.
C) assumes that the purchasing power of money has gone up.
D) is required by the FASB to be used in highly inflationary countries.
Q2) Which of the following is true concerning inflation disclosures?
A) The gearing adjustment was developed primarily for the auto industry.
B) The Dutch prefer to use historical cost accounting due to its objectivity.
C) Current cost adjustments are based on the fact that the value of money has fallen.
D) The IASB does not recommend one specific approach to account for inflation.
Q3) During the 1990s, Philips reverted back from inflation-adjusted statements to historical cost statements in order to
I..improve communications to shareholders
II..simplify accounting systems
A) only I
B) only II
C) I and II
D) neither I or II
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13
Chapter 12: Corporate Governance and Control of Global Operations
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Sample Questions
Q1) If a subsidiary in a global company is considered to be an integrated player, A) it tends to receive but not share knowledge.
B) its information flows would be reciprocal.
C) it is probably organized around geographic lines of business.
D) it would be multidomestic rather than transnational.
Q2) Responsiveness to local conditions results in A) global integration.
B) differentiation.
C) worldwide innovation.
D) a common corporate culture.
Q3) COSO characteristics of internal control include I..effectiveness and efficiency of operations
II..reliability of financial reporting
A) only for I
B) only for II
C) neither I or II
D) both I and II
Q4) The use of external experts is common in the international division structure.
A)True
B)False
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Chapter 13: Foreign Exchange Risk Management
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Sample Questions
Q1) What is the amount of the foreign exchange gain or loss that it will recognize on November 15?
A) $350 gain
B) $200 loss
C) $100 loss
D) $350 loss
E) gain or loss is deferred
Q2) What is the dollar value of purchases on October 31?
A) $297,050
B) $296,950
C) $297,250
D) $297,400
Q3) The bid rate is
A) the rate at which the foreign exchange trader will buy foreign currency.
B) the rate at which the foreign exchange trader will sell foreign currency.
C) the rate at which the company doing business with the trader will buy foreign currency.
D) the rate at which the company doing business with the trader will sell foreign currency.
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Page 15
Chapter 14: International Budgeting and Performance Evaluation
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Sample Questions
Q1) There have been few good studies on the use of local currency versus parent currency in establishing budgets. However, the Appleyard study of a small sample of British firms found that
A) most firms set their budgets in local currency.
B) most firms set their budgets in sterling.
C) most firms set their budgets in both sterling and the local currency.
D) most firms set their budgets in the local currency, although all of them saw the final results in sterling.
Q2) The local currency should be used for performance evaluation purposes if
A) the MNE leaves considerable autonomy to the foreign operation.
B) sales are made in the foreign currency.
C) the foreign currency is relatively stable.
D) the local manager is given authority and responsibility to hedge foreign exchange differences.
Q3) A challenge for the strategic control process is
A) clarity in planning
B) the process gets big and bureacratized
C) nonfinancial measures
D) annual operating plans
Page 16
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Chapter 15: International Auditing Issues
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40 Verified Questions
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Sample Questions
Q1) Based on Messier et al's (2005) definition, successful auditing has two requirements: an objective (independent), competent person and quantifiable (and verifiable information).
False
A)True
B)False
Q2) In terms of educational experience to become a certified accountant,
A) the French rely on the apprenticeship approach.
B) the United States use university training as a prerequisite for certification.
C) the Dutch do not rely very much on university training of accountants.
D) the British have a dual approach that uses different styles of universities to train accountants.
Q3) Some countries have an apprentice approach for auditors which does not require university training.
True
A)True B)False
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Chapter 16: International Taxation Issues
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45 Verified Questions
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Sample Questions
Q1) The concept of neutrality means that
A) under similar circumstances, taxpayers should pay the same tax.
B) the tax effect should not have an impact on business decisions.
C) assets and liabilities should not be subject to taxation, only increases in equity.
D) foreign and domestic source income should always be taxed at the same rate.
Q2) A tax have is a place where foreign investors pay a minimum of tax to their home country.
A)True
B)False
Q3) The concept of equity means that
A) under similar circumstances, taxpayers should pay the same tax.
B) the tax effect should not have an impact on business decisions.
C) assets and liabilities should not be subject to taxation, only increases in equity.
D) foreign and domestic source income should always be taxed at the same rate.
Q4) The two approaches to taxing corporate income are the classic and the integrated systems.
A)True
B)False
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