Multinational Accounting Exam Review
Course Introduction
Multinational Accounting explores the principles, practices, and challenges associated with accounting in international business environments. The course covers topics such as foreign currency transactions, international financial reporting standards (IFRS), global tax regulations, transfer pricing, and the consolidation of foreign subsidiaries. Students gain insights into how multinational corporations manage financial reporting and compliance across diverse regulatory and cultural contexts, preparing them to address the complexities of globalization in accounting.
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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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) If a firm is not involved in international commercial transactions, knowledge of international business is unnecessary.
Multiple Choice
A)True
B)False
Answer: False
Q2) Double entry bookkeeping quickly had world-wide acceptance, as the British accepted it in the 1400s.
A)True
B)False
Answer: False
Q3) When examining the lists of the largest corporations in the world, it is obvious that A) European firms dominate the list of large and most profitable firms.
B) exchange rates have the potential of distorting the list.
C) Japanese companies are the largest in sales and most profitable in the world.
D) U.S. companies are the largest in sales but are not among the most profitable.
Answer: B
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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) All of the following affect secrecy and transparency except A) measurement of assets and profits
B) individualism and collectivism
C) power distance
D) uncertainty avoidance
Answer: A
Q2) Large power distance is more compatible with which accounting value?
A) professionalism.
B) uniformity.
C) transparency.
D) none of the above.
Answer: B
Q3) A major accounting cultural value that relates to accounting disclosure is A) professionalism.
B) uniformity.
C) individualism.
D) transparency.
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) Which of the following accurately reflects Italian accounting?
A) There is a strong emphasis on shareholders.
B) The interests of government and the taxation authorities take precedence over shareholders.
C) Uniformity for planning purposes is emphasized.
D) A flexible approach to valuation.
Answer: B
Q2) The Netherlands is famous for its business economics approach to accounting.
A)True
B)False
Answer: True
Q3) The basis for French accounting has had a underlying objective of more effective national economic planning.
A)True
B)False
Answer: True
Q4) A major business Japanese feature that influences accounting is the keiretsu.
A)True
B)False
Answer: True
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Chapter 4: Comparative International Financial Accounting
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Sample Questions
Q1) Which of the following accurately reflects Thai accounting?
A) Only transportation companies are required to file or publish annual accounts.
B) The government has final approval on accounting regulations.
C) Independent accounting measurement approaches do not consider IAS standards.
D) It was the only Asian country which did not make any reforms after the Asian "flu".
Q2) India's accounting system is of a British origin.
A)True
B)False
Q3) In Russia, accounting regulations are generally created by?
A) Private sector accountants.
B) Security Exchange (SET)
C) Ministry of Finance.
D) IASC.
Q4) Which of the following accurately reflects Chinese accounting?
A) There is a strong Soviet-style accounting influence.
B) The accounting system has been changed to conform with U.S. principles.
C) A more micro-oriented decision-making approach is being encouraged.
D) The Japanese system of accounting has been adopted.
Page 6
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Chapter 5: International Financial Statement Analysis
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Sample Questions
Q1) Goodwill
A) is amortized in the United States
B) is immediately expensed in Japan
C) is amortized in Britain
D) is subject to an impairment test in Britain.
Q2) The stock market is a dominant influence on earnings in
A) the UK and US
B) Japan
C) continental europe
D) countries with extensive infrastructure
Q3) Assume that translated U.K. earnings are $100 and U.S. earnings are $120. The index of conservatism is
A) .800 (U.S. is more conservative)
B) .800 (British is more conservative)
C) 1.200 (U.S. is more conservative)
D) 1.200 (British is more conservative)
Q4) A key international financial analysis question is the extent of the impact of accounting differences on earnings assessments.
A)True
B)False
Page 7
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Chapter 6: International Transparency and Disclosure
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Sample Questions
Q1) Why does Switzerland have one of the lowest levels of disclosure
A) the size of the market is very high
B) the size of the market is small
C) a sophisticated regulation system
D) secrecy is highest
Q2) All of the following international organizations are now issuing more detailed accounting requirements except
A) PGA
B) UN
C) OECD D. IASC
Q3) Which country provides segment disclosure on a basis of managerial organization
A) UK
B) Japan
C) Italy
D) US
Q4) Inflation accounting
A) is given by most MNEs
B) is required in Japan
C) is found in South America
D) is required in US GAAP
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Chapter 7: International Accounting Standards and Global Convergence
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Sample Questions
Q1) Trade unions are not one of the major participant groups influencing MNE information disclosure.
A)True
B)False
Q2) IOSCO is
A) a part of the UN
B) a relic of the European customs union
C) an organization of securities market regulators
D) a group of accountants
Q3) All of the following are trade unions except
A) ETUC
B) ICFTU
C) WCL
D) IASC
Q4) The SEC does not now require the reconciliation of IFRS financial statements to US GAAP.
A)True
B)False
Page 9
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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) Major problems have occurred with joint ventures in Russia, Eastern Europe and China because of the accounting systems.
A)True
B)False
Q2) According to the efficient market hypothesis as it relates to goodwill,
A) share prices do not accurately reflect all publicly available information.
B) accounting treatment of intangibles is not as important as the disclosure of information on how they are accounted for.
C) goodwill should be set up as an asset and amortized.
D) goodwill should be written off to reserves.
Q3) The MNE disclosure of cash flow statements
A) is decreasing in favor of working capital funds statements
B) is increasing over time
C) is limited by a lack of a restrictive consolidation standard
D) helps the analysis of barter transactions
Q4) No company uses the pooling-of interests consolidation method because it is now prohibited throughout the world by standards.
A)True
B)False
Page 10
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Chapter 9: International Segment Reporting
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Sample Questions
Q1) The dual-yardstick proposal for segment disclosures
A) suggests that segments be established consistent with the company's organizational structure.
B) suggests that industry and country groupings be related to each other rather than an external standard.
C) requires geographic segmentation along country lines.
D) requires that geographic and industry data be combined together in a matrix reporting format.
Q2) The revised IAS 14 expands the scope of managerial discretion in segment identification.
A)True
B)False
Q3) The major problem for an auditor of segment information:
A) is that 50 percent of sales is not always sold externally.
B) is that sales and profits are given by line of business, but sales only for geographic segments.
C) is segment identification
D) is that profits are given by geographic area but not line of business.
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Chapter 10: Foreign Currency Transactions and Translation
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Sample Questions
Q1) IAS 21 and SFAS 52 are similar.
A)True
B)False
Q2) Which foreign currency translation standard uses the following objective:
"1) Provide information that is generally compatible with the expected economic effects of a rate change on an enterprise's cash flows and equity.
2) Reflect in consolidated statements the financial results and relationships of the individual consolidated entities as measured in their functional currencies in conformity with generally accepted accounting principles."
A) Accounting Research Study #12
B) FASB Statement 8
C) FASB Statement 52
D) International Accounting Standard 14.
Q3) Remeasurement does not require the temporal rate method.
A)True
B)False
Q4) The current rate method would most likely have a translation adjustment.
A)True
B)False
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Chapter 11: International Accounting for Price Changes
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Sample Questions
Q1) Current cost accounting is required in the I..UK
II..US
A) only I
B) only II
C) I and II
D) neither I nor II
Q2) The effect of inflation on nonmonetary assets is reflected in the
A) only I
B) only II
C) both I and II
D) neither I or II
Q3) Netherlands is well known for the development of replacement value accounting.
A)True
B)False
Q4) Philips introduced current value financial statements
A) to be consistent with international accounting standards
B) because no company was using general purchasing power adjustments
C) for internal cost accounting purposes
D) to consolidate the Indonesian subsidiary
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Chapter 12: Corporate Governance and Control of Global Operations
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Sample Questions
Q1) Sarbanes-Oxley Act of 2002 requires management to issue a yearly report with their assessment of the effectiveness of internal controls.
A)True
B)False
Q2) An advantage of an international division structure over a domestic structure is the minimization of the transfer pricing problem.
A)True
B)False
Q3) A geographic organizational structure works best when
A) there are narrow, relatively simple product lines.
B) when product lines are rapidly changing.
C) product expertise is more important than country expertise.
D) the company needs economies of scale.
Q4) Outside the United States, concentrated ownership
A) is positively associated with performance
B) is negatively associated with performance
C) has no association with performance
D) only occurs with state ownership
Page 14
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Chapter 13: Foreign Exchange Risk Management
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Sample Questions
Q1) A simultaneous spot and forward transaction is a (an)
A) direct transaction.
B) indirect transaction.
C) swap.
D) option.
Q2) Assume that RadCo enters into a forward contract. What is the dollar value of the purchases on November 15?
A) $297,050
B) $296,950
C) $297,250
D) $297,400
Q3) A transaction exposure risk can be eliminated with a
A) call option
B) put option
C) forward
D) bank deposit in the foreign country
Q4) Most companies do nothing about foreign exchange rate risk.
A)True
B)False
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Chapter 14: International Budgeting and Performance Evaluation
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Sample Questions
Q1) Because of the reliance on budgets, American managers reduce "slack" in budgets.
A)True
B)False
Q2) Which of the following Lessard/Lorange translation approaches forces management to predict the future?
A) setting the budget and tracking performance at the actual rate at the time of the budget.
B) setting the budget at the actual rate at the time of the budget and tracking performance at the actual rate at the end of the period.
C) setting the budget at the projected rate and tracking performance at the rate at the end of the period.
D) updating the budget for the end of period rate and tracking performance at the end of period rate.
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
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Chapter 15: International Auditing Issues
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Sample Questions
Q1) With respect to accounting services, the General Agreement on Trade in Services (GATS)
A) was enacted in the Uruguay Round of GATT negotiations, and it resulted in the free trade in accounting services.
B) efforts are being concentrated on tariff barriers to the cross-border trade in services.
C) governments are all required to use the same reciprocity rules.
D) wants to ensure that quality of service is not compromised.
Q2) According to the reciprocity agreement between the United States and Canada,
A) Canadian chartered accountants must pass the Uniform CPA exam in order to practice in the United States.
B) Canadians and Americans who are certified in their own country can practice in the other country by registering with the proper accounting board and paying a one-time fee.
C) any accountant, even one who is not certified in either the United States or Canada, can practice in the other country by passing a special exam.
D) a special exam has been developed which focuses on the differences between Canada and the United States.
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Page 17
Chapter 16: International Taxation Issues
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Sample Questions
Q1) Assume that a U.S. company has a subsidiary in the United Kingdom that earned $100,000 (translated from pounds to dollars) in 1996 at a tax rate of 40 percent. The tax rate in the United States is 34 percent, and the withholding tax rate on dividends is 5 percent. If the subsidiary declares a 100% dividend, how much of its income is included in U.S. taxable income?
A) $100,000
B) $ 60,000
C) $ 39,600
D) nothing.
Q2) In the US, for foreign corporations that are not CFC
A) the deferral of income applies when it is foreign-based company shipping income
B) income is not taxable to the U.S parent corporation until a dividend is declared
C) the deferral of income includes bribes paid in foreign countries
D) requires that income be earned from the sale or purchase of goods produced inside the country where a tax haven corporation is located.
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