Reference no: EM13940648

Part A-

Question 1: 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: 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: 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: 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: 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: 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: 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: 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: 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: 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

Part B-

Question 1: 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: 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: 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: 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: 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: 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: 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: 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: 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: 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

Part C-

Question 1: 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: What is the primary source of capital in Germany?

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

Question 3: 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: By what title are professional accountants in Mexico known?

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

Question 5: 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: 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: What functional area dominates the accounting profession in Germany?

a. Taxation
b. Auditing
c. Financial reporting
d. Managerial Accounting

Question 8: 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: 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: 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