Exam 22: Accounting in a Global Market

Under international accounting standards regarding depreciation, an entity

Which of the following is true regarding the accounting for research and development costs under international accounting standards?

Which of the following is not correct regarding the translation of a foreign entity's accounts?

Which of the following is not a long-term, joint FASB-IASB project?

Which of the following is not a short-term convergence topic that the FASB must address in order to eliminate the reconciliation of accounts prepared under different sets of standards of different countries?

A translation adjustment resulting from the translation process is disclosed on the financial statements as

Under international accounting standards, cash received from interest (associated with interest revenue) can be shown on the statement of cash flows as an

Brown Enterprises, a subsidiary of Biden Company based in Delaware, reported the following information at the end of its first year of operations (all in British pounds): assets--483,000; expenses--360,000; liabilities--105,000; capital stock--90,000, revenues--648,000. Relevant exchange rates are as follows: As a result of the translation process, what amount is recorded on the financial statements as the translation adjustment?

The following financial information is available for Paul Company, a hypothetical non-U.S. firm with shares listed on a U.S. stock exchange: If Paul were following U.S. GAAP, development costs would be expensed when incurred. According to U.S. GAAP, the possible obligation for severance benefits would not be recognized until it had become probable. Prepare a reconciliation of Paul's reported stockholders' equity and net income to the amounts of these items under U.S. GAAP.

Under international accounting standards, deferred tax assets and liabilities are classified as

The primary purpose of the Security and Exchange Commission's Form 20-F is to

Which of the following is the primary factor in determining the functional currency of a foreign subsidiary?

Under international accounting standards, cash paid for dividends can be shown on the statement of cash flows as

Which of the following is theleast likely means a company might choose to meet the needs of international investors?

The proper analysis of foreign operations by financial statement users requires that financial statements of the foreign operations be expressed in a common currency. For a U.S. company with a French subsidiary, this means converting the subsidiary's financial statements from francs to U.S. dollars. One of the major issues in translating the financial statements of a foreign branch, division, or subsidiary is determining the functional currency of the foreign entity. The term "functional currency" has been defined by the Financial Accounting Standards Boards (FASB) as the currency of the primary economic environment in which the entity operates; normally, the currency of the environment in which the entity primarily generates and expends cash. Although the definition may seem relatively straightforward, the Financial Accounting Standards Board found it necessary to list various factors to guide management in determining the functional currency. Required: Identify the factors FASB identified that might be helpful in making the functional currency decision.

Which of the following is true regarding the accounting for property, plant, and equipment under international accounting standards?

Churchill Enterprises, a subsidiary of Roosevelt Company based in New York, reported the following information at the end of its first year of operations (all in British pounds): assets--338,000; expenses--360,000; liabilities--101,000; capital stock--80;000, revenues--517,000. Relevant exchange rates are as follows: As a result of the translation process, what amount is recorded on the financial statements as the translation adjustment?

Which of the following is not a short-term convergence topic that the IASB must address in order to eliminate the reconciliation of accounts prepared under different sets of standards of different countries?

The measurement of deferred tax liabilities and assets under international accounting standards requires the use of

Under international accounting standards, cash received from dividends (associated with dividend revenue) can be shown on the statement of cash flows as