Question 1

Current cost accounting adjusts all items in a financial statement to factor out the effects of inflation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true regarding assessing the performance of a foreign subsidiary and its managers?

Accepted Answer

A)  It is inappropriate to compare subsidiaries against each other on the basis of return on investment (ROI) .
B)  Foreign subsidiaries operate in widely similar economic,political,and social conditions.
C)  Managers should be evaluated in local currency terms after making allowances for items over which they have no control.
D)  The evaluation of a subsidiary should be combined with the evaluation of its manager.E) None of the above
F) B) and D)

Question 3

In the United States,government regulations require firms to publish detailed information about their training and employment policies.

Accepted Answer

A) True 
 B)False

Question 4

Describe the Statement 52,whose requirements all U.S.-based multinational firms must follow.

Accepted Answer

The Statement 52,"Foreign Currency Trans...

Question 5

Why is it advantageous for firms to organize themselves as a set of separate legal entities? How do consolidated financial statements benefit these firms?

Accepted Answer

Many firms organize themselves as a set of separate legal entities to limit its total legal liability or to take advantage of corporate tax regulations.Multinationals are often required by the countries in which they do business to set up a separate company.Thus,the typical multinational comprises a parent company and a number of subsidiary companies located in different countries,most of which are wholly owned by the parent.However,although the subsidiaries may be separate legal entities,they are not separate economic entities.The purpose of consolidated financial statements is to provide accounting information about a group of companies that recognize their economic interdependence.

Question 6

Which of the following statement about the external sources of capital is not true?

Accepted Answer

A)  A country's accounting system tends to reflect the relative importance of individual investors,banks,and government as providers of capital.
B)  The three main external sources of capital for businesses are individual investors,banks,and government.
C)  In most advanced countries,only one of the main sources of external capital is important.
D)  The importance of each source of capital varies from country to country.E) B) and C)
F) B) and D)

Question 7

In which of the following combinations of the Lessard-Lorange model is it possible that the ending spot exchange rate used to evaluate performance against the budget might be quite different from the initial spot exchange rate used to translate the budget?

Accepted Answer

A)  II
B)  IE
C)  EE
D)  PPE) None of the above
F) B) and C)

Question 8

What is the relationship between business,providers of capital,and the development of a country's accounting system?

Accepted Answer

The three main external sources of capit...

Question 9

How does the culture of a country influence the nature of its accounting system? What is uncertainty avoidance?

Accepted Answer

Researchers have found that the extent t...

Question 10

A consolidated financial statement combines the separate financial statements of two or more companies to yield a single set of financial statements as if the individual companies were really one.

Accepted Answer

A) True 
 B)False

Question 11

Developed nations tend to have small,complex organizations,whose accounting problems are far more difficult than those of large organizations.

Accepted Answer

A) True 
 B)False

Question 12

Without consolidated financial statements,a multinational firm could conceal losses in an unconsolidated subsidiary.

Accepted Answer

A) True 
 B)False  True

Question 13

In the United States and Great Britain,the financial accounting system is oriented toward providing individual investors with the information they need to make decisions about purchasing or selling corporate stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true regarding the European Union (EU) and its influence on accounting standards?

Accepted Answer

A)  Adoption of the directives issued by the EU is voluntary and member states are not obligated to incorporate them into their own national laws.
B)  The EU may have a better chance of achieving harmonization than the IASB.
C)  The EU requires that the financial accounts issued by publicly listed companies in the EU are to be in accordance with European standards.
D)  The objective of the requirements of the EU is to ensure the financial positions of companies from different member states are represented according to their national laws.E) All of the above
F) A) and D)

Question 15

Firms pursuing _____ business strategies disperse each value creation activity to its optimal location in the world.

Accepted Answer

A)  localization and transnational
B)  global and localization
C)  transnational and global
D)  localization and internationalE) A) and B)
F) None of the above

Question 16

According to Hofstede,which of the following countries is characterized by low uncertainty avoidance?

Accepted Answer

A)  Greece
B)  Sweden
C)  Japan
D)  MexicoE) B) and D)
F) None of the above

Question 17

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Accepted Answer

A) True 
 B)False

Question 18

According to Lessard and Lorange,the three exchange rates that can be used to translate foreign currencies into the corporate currency are the historical rate,the spot rate,and the forward rate.

Accepted Answer

A) True 
 B)False

Question 19

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards and if they are also reliable is known as:

Accepted Answer

A)  an accounting guideline.
B)  an operating procedure.
C)  standardization.
D)  an audit.E) All of the above
F) C) and D)

Question 20

Until recently,which of the following accounting practices has been true?

Accepted Answer

A)  Japanese law generally allowed revaluation.
B)  Dutch standards prohibited revaluation and prescribes historic cost.
C)  Capitalization of financial leases was required practice in France.
D)  German accountants have treated depreciation as a liability.E) B) and D)
F) B) and C) D

Exam 19: Accounting in the International Business

Current cost accounting adjusts all items in a financial statement to factor out the effects of inflation.

Correct Answer
verified

Which of the following statements is true regarding assessing the performance of a foreign subsidiary and its managers?

Correct Answer
verified

In the United States,government regulations require firms to publish detailed information about their training and employment policies.

Correct Answer
verified

Describe the Statement 52,whose requirements all U.S.-based multinational firms must follow.

Correct Answer
verified
The Statement 52,"Foreign Currency Trans...
View Answer

Why is it advantageous for firms to organize themselves as a set of separate legal entities? How do consolidated financial statements benefit these firms?

Which of the following statement about the external sources of capital is not true?

Correct Answer
verified

In which of the following combinations of the Lessard-Lorange model is it possible that the ending spot exchange rate used to evaluate performance against the budget might be quite different from the initial spot exchange rate used to translate the budget?

Correct Answer
verified

What is the relationship between business,providers of capital,and the development of a country's accounting system?

Correct Answer
verified
The three main external sources of capit...
View Answer

How does the culture of a country influence the nature of its accounting system? What is uncertainty avoidance?

Correct Answer
verified
Researchers have found that the extent t...
View Answer

A consolidated financial statement combines the separate financial statements of two or more companies to yield a single set of financial statements as if the individual companies were really one.

Correct Answer
verified

Developed nations tend to have small,complex organizations,whose accounting problems are far more difficult than those of large organizations.

Correct Answer
verified

Without consolidated financial statements,a multinational firm could conceal losses in an unconsolidated subsidiary.

Correct Answer
verified
True

In the United States and Great Britain,the financial accounting system is oriented toward providing individual investors with the information they need to make decisions about purchasing or selling corporate stocks and bonds.

Correct Answer
verified

Which of the following statements is true regarding the European Union (EU) and its influence on accounting standards?

Correct Answer
verified

Firms pursuing _____ business strategies disperse each value creation activity to its optimal location in the world.

Correct Answer
verified

According to Hofstede,which of the following countries is characterized by low uncertainty avoidance?

Correct Answer
verified

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Correct Answer
verified

According to Lessard and Lorange,the three exchange rates that can be used to translate foreign currencies into the corporate currency are the historical rate,the spot rate,and the forward rate.

Correct Answer
verified

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards and if they are also reliable is known as:

Correct Answer
verified

Until recently,which of the following accounting practices has been true?

Correct Answer
verified
D

Exam 19: Accounting in the International Business

Current cost accounting adjusts all items in a financial statement to factor out the effects of inflation.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding assessing the performance of a foreign subsidiary and its managers?

Correct AnswerverifiedShow Answer

In the United States,government regulations require firms to publish detailed information about their training and employment policies.

Correct AnswerverifiedShow Answer

Describe the Statement 52,whose requirements all U.S.-based multinational firms must follow.

Correct AnswerverifiedThe Statement 52,"Foreign Currency Trans...View AnswerShow Answer

Why is it advantageous for firms to organize themselves as a set of separate legal entities? How do consolidated financial statements benefit these firms?

Which of the following statement about the external sources of capital is not true?

Correct AnswerverifiedShow Answer

In which of the following combinations of the Lessard-Lorange model is it possible that the ending spot exchange rate used to evaluate performance against the budget might be quite different from the initial spot exchange rate used to translate the budget?

Correct AnswerverifiedShow Answer

What is the relationship between business,providers of capital,and the development of a country's accounting system?

Correct AnswerverifiedThe three main external sources of capit...View AnswerShow Answer

How does the culture of a country influence the nature of its accounting system? What is uncertainty avoidance?

Correct AnswerverifiedResearchers have found that the extent t...View AnswerShow Answer

A consolidated financial statement combines the separate financial statements of two or more companies to yield a single set of financial statements as if the individual companies were really one.

Correct AnswerverifiedShow Answer

Developed nations tend to have small,complex organizations,whose accounting problems are far more difficult than those of large organizations.

Correct AnswerverifiedShow Answer

Without consolidated financial statements,a multinational firm could conceal losses in an unconsolidated subsidiary.

Correct AnswerverifiedTrue

In the United States and Great Britain,the financial accounting system is oriented toward providing individual investors with the information they need to make decisions about purchasing or selling corporate stocks and bonds.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding the European Union (EU) and its influence on accounting standards?

Correct AnswerverifiedShow Answer

Firms pursuing _____ business strategies disperse each value creation activity to its optimal location in the world.

Correct AnswerverifiedShow Answer

According to Hofstede,which of the following countries is characterized by low uncertainty avoidance?

Correct AnswerverifiedShow Answer

Accounting information is the means by which firms communicate their financial position to the providers of capital.

Correct AnswerverifiedShow Answer

According to Lessard and Lorange,the three exchange rates that can be used to translate foreign currencies into the corporate currency are the historical rate,the spot rate,and the forward rate.

Correct AnswerverifiedShow Answer

The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards and if they are also reliable is known as:

Correct AnswerverifiedShow Answer

Until recently,which of the following accounting practices has been true?

Correct AnswerverifiedD

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The Statement 52,"Foreign Currency Trans...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The three main external sources of capit...
View Answer

Correct Answer
verified
Researchers have found that the extent t...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
D