Exam (elaborations)
Introduction to Financial Accounting International Edition 8e Curtis L Norton Gary A Porter
- Course
- Institution
Introduction to Financial Accounting International Edition 8e Curtis L Norton Gary A Porter
[Show more]
Seller
Follow
evileye251
Reviews received
Content preview
,Appendix A: International Financial Reporting StandardsMULTIPLE CHOICE
1. All of the following statements are true about inflation except:
a. The U.S. and Germany adjust their financial statements for inflation.
b. In recent years, inflation has been more rampant in Latin America and South America than
the rest of the world.
c. The FASB developed rules for companies in the United States to use to adjust for
inflation.
d. U.S. companies no longer present financial information adjusted for the effects of
inflation.
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: pp. A-2 to A-4 OBJ: LO: A-01 NAT: BUSPROG: Diversity
STA: AICPA: FN-Reporting | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Application
2. Which of the following statements is true regarding common law?
a. In common law countries, there are generally more statutes written into the laws.
b. In common law countries, there is less reliance on interpretation by the courts.
c. Because more details are written into U.S. law, FASB has shorter and more general
accounting standards than most countries.
d. The common law system has its roots in the United Kingdom.
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: pp. A-2 to A-4 OBJ: LO: A-01 NAT: BUSPROG: Communication
STA: AICPA: BB-Legal | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Knowledge
3. Which of the following countries do not use a common law system?
a. The United States
b. Germany
c. The United Kingdom
d. Both a and c are correct.
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-2 to A-4 OBJ: LO: A-01 NAT: BUSPROG: Diversity
STA: AICPA: BB-Legal | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Knowledge
4. All of the following are among the most important reasons why accounting standards differ around the
world except:
a. differences in the state of economic development
b. differences in taxation
c. differences in inflation
d. differences in code law in all countries around the world
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: pp. A-2 to A-4 OBJ: LO: A-01 NAT: BUSPROG: Diversity
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Evaluation
5. All of the following are advantages available to companies if a single set of accounting standards were
used except:
a. A single set of worldwide accounting standards would have no effect on accounting fee
costs.
© 2013 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, b. A single set of standards would make it much easier to decide whether to acquire a foreign
company.
c. A single set of worldwide accounting standards would facilitate comparisons for
investment purposes.
d. A single set of worldwide accounting standards would make it easier to access foreign
capital markets
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: pp. A-4 to A-5 OBJ: LO: A-02 NAT: BUSPROG: Diversity
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Comprehension
6. Which of the following is a commonly cited disadvantage of having a new unified set of accounting
standards?
a. Acquiring foreign companies would become a more confusing proposition.
b. Corporations may find themselves more susceptible to lawsuits due to the principles-
based system.
c. Time and money would not be saved in accessing capital markets abroad.
d. The SEC would be dissolved if international accounting standards were adopted.
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-4 to A-5 OBJ: LO: A-02 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Knowledge
7. Which organization would have the ultimate responsibility of deciding if the advantages outweigh the
disadvantages in the adoption of IFRS accounting standards in the U.S.?
a. FASB
b. SEC
c. IASB
d. AICPA
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-4 to A-5 OBJ: LO: A-02 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Analysis
8. The benefits of a single set of accounting standards used around the world would include all of the
following except:
a. They would eventually save companies considerable money in accounting fees.
b. They would prevent competitors from acquiring each other.
c. They would allow easier comparisons by analysts and investors.
d. They would facilitate access to foreign capital markets.
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-4 to A-5 OBJ: LO: A-02 NAT: BUSPROG: Diversity
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Comprehension
© 2013 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, 9. The group with primary responsibility for development of a single set of accounting standards around
the world is the
a. FASB
b. SEC
c. IFRS
d. IASB
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: pp. A-6 to A-7 OBJ: LO: A-03 NAT: BUSPROG: Diversity
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Knowledge
10. During what year did the IASB and FASB reaffirm their commitment to achieving convergence of
accounting standards in the U.S.?
a. 2007
b. 2009
c. 2002
d. 2008
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-6 to A-7 OBJ: LO: A-03 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Knowledge
11. The International Accounting Standards Committee was established in 1973 to develop
worldwide standards. Which group replaced it in 2001?
a. FASB
b. IFRS
c. IASB
d. IIA
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: pp. A-6 to A-7 OBJ: LO: A-03 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Knowledge
12. What is the name of the formalized commitment of the IASB and the FASB to converge U.S. and
international accounting standards?
a. The Sarbanes-Oxley Act
b. The Norwalk Agreement
c. The IFRS Foundation
d. The Conceptual Framework
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: pp. A-6 to A-7 OBJ: LO: A-03 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-02-GAAP KEY: Bloom's: Knowledge
13. On the reporting of liabilities where a range of values exists as a possible outcome, IFRS requires
which of the following points to be recorded as a provision, if the outcome is probable?
a. Low end of the range.
b. High end of the range.
c. Midpoint of the range.
d. IFRS presents no specific guidance as to this point.
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: pp. A-7 to A-10 OBJ: LO: A-04 NAT: BUSPROG: Communication
STA: AICPA: FN-Reporting | ACBSP: APC-16-Current Liabilities
KEY: Bloom's: Knowledge
14. Which of the following inventory costing methods is prohibited under IFRS?
© 2013 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
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 evileye251. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $26.63. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now