Test Bank for International Accounting, 6th Edition by Timothy Doupnik
4 views 0 purchase
Course
International Accounting
Institution
International Accounting
Test Bank for International Accounting 6e 6th Edition by Timothy Doupnik, Mark Finn, Giorgio Gotti and Hector Perera. ISBN-13: 6991 Full Chapters test banks are included Chapter 1:Introduction to International Accounting Chapter 2:Worldwide Accounting Diversity Chapter 3: InternationalConverg...
Test Bank for International Accounting, 6th Edition by Timothy Doupnik
Answers Included ✅
Chapter 01 6e
1) Which of the following groups is a supranational organization?
A) International Accounting Standards Board
B) Organization for Economic Cooperation and Development
C) International Federation of Accountants
D) All of these answers are correct.
2) Determination of net present value involves:
R
A) forecasting future profits and cash flows.
B) discounting future cash flows back to their present value.
U
C) analysis on an after-tax basis.
D) All of these answers are correct.
SE
3) In which of the following levels can international accounting be defined?
A) Supranational organizations
B) Company
C) Country IS
O
D) All of these answers are correct.
N
4) Which of the following functional areas is included in the study of international accounting?
N
A) Financial accounting
B) Managerial
O
C) Taxation
D) All of these answers are correct.
C
ED
5) The factor used to convert from one country's currency to another country's currency is called
the:
A) interest rate.
M
B) cost of capital.
C) exchange rate.
D) strike price.
1
,6) What is the term used to describe the possibility that a foreign currency will decrease in U.S.
dollar 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
7) Foreign exchange risk arises when:
R
A) business transactions are denominated in foreign currencies.
B) sales are made to customers in a domestic country.
U
C) goods or services purchased from suppliers in a foreign country are denominated in
domestic currency.
SE
D) auditing reports are prepared in a foreign currency.
IS
8) In international accounting, a "hedge" is:
A) a business transaction made to reduce the exposure of foreign exchange risk.
B) the legal barriers in various divisions of a multinational company.
O
C) the loss in US dollar resulting from a decline in the value of the US dollar relative to
foreign currencies.
N
D) a form of foreign direct investment.
N
9) Purchasing an option to buy foreign currency at a predetermined exchange rate in order to
O
reduce exchange risk is called:
A) transfer pricing.
C
B) hedging.
C) translating.
ED
D) cross-listing.
10) What term is used to describe the process of reducing foreign exchange risk?
M
A) International accounting
B) Exposure
C) Hedging
D) Globalization
2
,11) What is the advantage of foreign direct investment?
A) Helps in retaining advantage over competition
B) Reduces transportation costs
C) Creates a company tailored to a foreign market's unique characteristics
D) All of these answers are correct.
12) How should we recognize the difference in the value of a receivable in a foreign currency at
the time it was recorded and the time the cash was received?
R
A) As an adjustment to stockholders' equity
B) As an adjustment to purchases
U
C) As an extraordinary capital expenditure
D) As a prior period adjustment
SE
13) What currency is used in the United Kingdom?
IS
A) Crown
B) Euro
C) British pound
O
D) UK dollar
N
14) Which of these European countries does NOT use the Euro as its domestic currency?
N
A) France
B) United Kingdom
O
C) Ireland
D) The Netherlands
C
ED
15) Which of the following terms is used to describe the combining of the financial statements of
all subsidiaries, both foreign and domestic, into the financial statements of the parent?
A) Convergence
B) Hedging
M
C) Consolidation
D) Incorporation
3
, 16) Why is auditing a multinational corporation potentially more difficult than auditing an entity
that has only domestic operations?
A) Language differences
B) Cultural differences
C) Multiple sets of accounting standards
D) All of these answers are correct.
17) What is the entry point for most companies into the world of international business?
R
A) Transfer pricing
B) Exporting
U
C) Foreign direct investment
D) Cross-listing on international stock exchanges
SE
18) For a U.S. multinational corporation, consolidating the financial statements of foreign
IS
subsidiaries requires two steps. First, the foreign subsidiary's statements must be restated
according to the U.S. GAAP. The next step is to:
A) convert the account balances into U.S. dollars.
O
B) determine the exchange rate gain or loss.
C) calculate the translation adjustment.
N
D) restate the income using international accounting standards.
N
19) When setting transfer prices among international subsidiaries, the corporation must:
O
A) make sure that the total tax is minimized.
B) ensure that the transfer prices are acceptable to the taxing authorities in the countries
C
involved.
C) do whatever it takes to make taxes paid in the United States as low as possible.
ED
D) follow the transfer pricing policy used for domestic transfers.
20) What is the primary provision of the Foreign Corrupt Practices Act?
M
A) To specify which corrupt practices are acceptable under U.S. law
B) To specify how to account for bribes paid by U.S. corporations to obtain business
from foreign governments
C) To inform internal auditors how to detect fraud in multinational corporations
D) To prohibit U.S. companies from paying bribes to foreign government officials to
obtain business
4
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller MedConnoisseur. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $19.99. You're not tied to anything after your purchase.
