Question 1

For which of the following topics is accounting under both U.S.GAAP and IFRS essentially the same?

Accepted Answer

A) Receivables. 
B) Long-term assets. 
C) Inventory. 
D) Research and development expenditures. 
A) Receivables. 
B) Long-term assets. 
C) Inventory. 
D) Research and development expenditures.

Question 2

When a country establishes financial reporting rules that closely resemble tax reporting rules,reported accounting profits tend to be:

Accepted Answer

A) Negative. 
B) Higher. 
C) Lower. 
D) Misreported. 
A) Negative. 
B) Higher. 
C) Lower. 
D) Misreported.

Question 3

The Norwalk Agreement:

Accepted Answer

A) Allows foreign companies listed on U.S.stock exchanges to prepare financial statements in accordance with IFRS. 
B) Formalizes the commitment between the FASB and IASB to converge U.S.GAAP and IFRS. 
C) Eliminates the requirement that U.S.firms report under U.S.GAAP. 
D) Gives authority to the IASB to set accounting standards for U.S.companies. 
A) Allows foreign companies listed on U.S.stock exchanges to prepare financial statements in accordance with IFRS. 
B) Formalizes the commitment between the FASB and IASB to converge U.S.GAAP and IFRS. 
C) Eliminates the requirement that U.S.firms report under U.S.GAAP. 
D) Gives authority to the IASB to set accounting standards for U.S.companies.

Question 4

How is preferred stock reported differently under U.S.GAAP and IFRS? Do you think preferred stock is a liability or an equity item? Why?

Accepted Answer

Under U.S.GAAP,preferred stock is usuall

Question 5

Convergence of accounting practices is expected to increase the flow of resources across borders.

Accepted Answer

A) True 
 B)False

Question 6

Suppose a severe storm floods a company's headquarters,causing damages to the building of $300,000 and destruction of inventory of $200,000.Because of the unusual nature of this event,the company had no flood insurance to cover these losses.Under IFRS,how much would the company report as an extraordinary loss in the current year's income statement?

Accepted Answer

A) $0. 
B) $200,000. 
C) $300,000. 
D) $500,000. 
A) $0. 
B) $200,000. 
C) $300,000. 
D) $500,000.

Question 7

Below are seven reasons for differences in accounting practices among countries.For each reason,at least two options are provided.For each reason,select the option that best describes Germany.

Accepted Answer

The answer of Below are seven reasons for differences in...

Question 8

Compared to that in the U.S,the cost to companies in other countries of documenting effective internal controls is:

Accepted Answer

A) Much greater. 
B) Slightly greater. 
C) About the same. 
D) Much less. 
A) Much greater. 
B) Slightly greater. 
C) About the same. 
D) Much less.

Question 9

Some countries are more secretive (Brazil and Switzerland),leading to fewer financial disclosures.

Accepted Answer

A) True 
 B)False

Question 10

Suppose a company pays interest of $10,000 for the year on borrowed amounts due in two years.Under U.S.GAAP,what is the most the company can report this year as cash outflows from financing activities related to this item?

Accepted Answer

A) $10,000. 
B) $2,000. 
C) $5,000. 
D) $0. 
A) $10,000. 
B) $2,000. 
C) $5,000. 
D) $0.

Question 11

IFRS stands for:

Accepted Answer

A) Independent Financial Reporting System. 
B) International Financing Reform System. 
C) International Financial Reporting Standards. 
D) International Financial Regulation of Securities. 
A) Independent Financial Reporting System. 
B) International Financing Reform System. 
C) International Financial Reporting Standards. 
D) International Financial Regulation of Securities.

Question 12

Why are some U.S.companies opposed to elimination of the LIFO inventory method?

Accepted Answer

A) Inventory amounts are more difficult to calculate under FIFO. 
B) LIFO most likely matches actual flow of inventory. 
C) Increased tax burden. 
D) Most international companies use LIFO. 
A) Inventory amounts are more difficult to calculate under FIFO. 
B) LIFO most likely matches actual flow of inventory. 
C) Increased tax burden. 
D) Most international companies use LIFO.

Question 13

Would a company be more likely to report a contingent liability under U.S.GAAP or IFRS?

Accepted Answer

A) U.S.GAAP. 
B) IFRS. 
C) Equally likely. 
D) Contingent liabilities are not reported under IFRS. 
A) U.S.GAAP. 
B) IFRS. 
C) Equally likely. 
D) Contingent liabilities are not reported under IFRS.

Question 14

Countries that have different rules for financial accounting and tax accounting,rely more on equity financing,and have historical political and economic ties with Great Britain are referred to as what types of countries?

Accepted Answer

A) Code law countries. 
B) European Union countries. 
C) Common law countries. 
D) Conformist countries. 
A) Code law countries. 
B) European Union countries. 
C) Common law countries. 
D) Conformist countries.

Question 15

One motivation for reducing differences in accounting practices across countries is to:

Accepted Answer

A) Decrease the flow of international capital. 
B) Allow greater competition among companies. 
C) Reduce companies' tax burdens. 
D) Make it easier for investors to compare companies from different countries. 
A) Decrease the flow of international capital. 
B) Allow greater competition among companies. 
C) Reduce companies' tax burdens. 
D) Make it easier for investors to compare companies from different countries.

Question 16

Under IFRS,inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases.

Accepted Answer

A) True 
 B)False

Question 17

Under U.S.GAAP,development expenditures are capitalized,while under IFRS,these expenditures must be expensed immediately.

Accepted Answer

A) True 
 B)False

Question 18

Over 115 jurisdictions,including Hong Kong,Australia,and all of the countries in the European Union (EU),either require or permit the use of IFRS.

Accepted Answer

A) True 
 B)False

Question 19

Suppose a company has research costs of $100,000 and development costs of $200,000 for the year.Under IFRS,what amount would be reported as an expense in the current year's income statement?

Accepted Answer

A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $300,000. 
A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $300,000.

Question 20

In countries where debt financing is more common (Japan)compared to equity financing,there is greater emphasis on reporting the ability of the company to earn profits for its investors rather than the ability to repay debt.

Accepted Answer

A) True 
 B)False

For which of the following topics is accounting under both U.S.GAAP and IFRS essentially the same?

When a country establishes financial reporting rules that closely resemble tax reporting rules,reported accounting profits tend to be:

The Norwalk Agreement:

How is preferred stock reported differently under U.S.GAAP and IFRS? Do you think preferred stock is a liability or an equity item? Why?

Convergence of accounting practices is expected to increase the flow of resources across borders.

Below are seven reasons for differences in accounting practices among countries.For each reason,at least two options are provided.For each reason,select the option that best describes Germany.

Compared to that in the U.S,the cost to companies in other countries of documenting effective internal controls is:

Some countries are more secretive (Brazil and Switzerland),leading to fewer financial disclosures.

Suppose a company pays interest of $10,000 for the year on borrowed amounts due in two years.Under U.S.GAAP,what is the most the company can report this year as cash outflows from financing activities related to this item?

IFRS stands for:

Why are some U.S.companies opposed to elimination of the LIFO inventory method?

Would a company be more likely to report a contingent liability under U.S.GAAP or IFRS?

Countries that have different rules for financial accounting and tax accounting,rely more on equity financing,and have historical political and economic ties with Great Britain are referred to as what types of countries?

One motivation for reducing differences in accounting practices across countries is to:

Under IFRS,inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases.

Under U.S.GAAP,development expenditures are capitalized,while under IFRS,these expenditures must be expensed immediately.

Over 115 jurisdictions,including Hong Kong,Australia,and all of the countries in the European Union (EU),either require or permit the use of IFRS.

Suppose a company has research costs of $100,000 and development costs of $200,000 for the year.Under IFRS,what amount would be reported as an expense in the current year's income statement?

In countries where debt financing is more common (Japan)compared to equity financing,there is greater emphasis on reporting the ability of the company to earn profits for its investors rather than the ability to repay debt.

A Framework for Financial Accounting

The Accounting Cycle: During the Period

The Accounting Cycle: End of the Period

Cash and Internal Controls

Receivables and Sales

Inventory and Cost of Goods Sold

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Investments

Filters

Exam 15: International Financial Reporting Standards

For which of the following topics is accounting under both U.S.GAAP and IFRS essentially the same?

When a country establishes financial reporting rules that closely resemble tax reporting rules,reported accounting profits tend to be:

The Norwalk Agreement:

How is preferred stock reported differently under U.S.GAAP and IFRS? Do you think preferred stock is a liability or an equity item? Why?

Convergence of accounting practices is expected to increase the flow of resources across borders.

Below are seven reasons for differences in accounting practices among countries.For each reason,at least two options are provided.For each reason,select the option that best describes Germany.

Compared to that in the U.S,the cost to companies in other countries of documenting effective internal controls is:

Some countries are more secretive (Brazil and Switzerland),leading to fewer financial disclosures.

Suppose a company pays interest of $10,000 for the year on borrowed amounts due in two years.Under U.S.GAAP,what is the most the company can report this year as cash outflows from financing activities related to this item?

IFRS stands for:

Why are some U.S.companies opposed to elimination of the LIFO inventory method?

Would a company be more likely to report a contingent liability under U.S.GAAP or IFRS?

Countries that have different rules for financial accounting and tax accounting,rely more on equity financing,and have historical political and economic ties with Great Britain are referred to as what types of countries?

One motivation for reducing differences in accounting practices across countries is to:

Under IFRS,inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases.

Under U.S.GAAP,development expenditures are capitalized,while under IFRS,these expenditures must be expensed immediately.

Over 115 jurisdictions,including Hong Kong,Australia,and all of the countries in the European Union (EU),either require or permit the use of IFRS.

Suppose a company has research costs of $100,000 and development costs of $200,000 for the year.Under IFRS,what amount would be reported as an expense in the current year's income statement?

In countries where debt financing is more common (Japan)compared to equity financing,there is greater emphasis on reporting the ability of the company to earn profits for its investors rather than the ability to repay debt.

A Framework for Financial Accounting

The Accounting Cycle: During the Period

The Accounting Cycle: End of the Period

Cash and Internal Controls

Receivables and Sales

Inventory and Cost of Goods Sold

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Investments

Filters