Question 1

Which of the following statements is correct?

Accepted Answer

A)  Retained earnings are translated at the average exchange rate for the year. 
B)  Capital stock of a foreign subsidiary is translated at the historical rate,that is,the rate prevailing on the date the subsidiary was acquired. 
C)  Dividends are translated at the average exchange rate for the year. 
D)  Assets and liabilities are translated at the historical rate prevailing when the subsidiary was acquired. 
A)  Retained earnings are translated at the average exchange rate for the year. 
B)  Capital stock of a foreign subsidiary is translated at the historical rate,that is,the rate prevailing on the date the subsidiary was acquired. 
C)  Dividends are translated at the average exchange rate for the year. 
D)  Assets and liabilities are translated at the historical rate prevailing when the subsidiary was acquired.

Question 2

Transit Importing Company.converts its foreign subsidiary financial statements using the translation process.The company's French subsidiary reported the following for 2014: revenues and expenses of 10,500,000 and 6,505,000 francs,respectively,earned or incurred evenly throughout the year,dividends of 500,000 francs were paid during the year.The following exchange rates are available:   Translated net income for 2014 is

Accepted Answer

A)  $910,860 
B)  $838,950 
C)  $805,860 
D)  $733,950 
A)  $910,860 
B)  $838,950 
C)  $805,860 
D)  $733,950

Question 3

Global Trading Company.converts its foreign subsidiary financial statements using the translation process.The company's Swiss subsidiary reported the following for 2014: revenues and expenses of 13,220,000 and 6,672,000 Swiss francs,respectively,earned or incurred evenly throughout the year,dividends of 2,000,000 Swiss francs were paid during the year.The following exchange rates are available:   Translated net income for 2014 is

Accepted Answer

A)  $891,408. 
B)  $809,544. 
C)  $1,283,408. 
D)  $1,165,544. 
A)  $891,408. 
B)  $809,544. 
C)  $1,283,408. 
D)  $1,165,544.

Question 4

Complete the following statement by choosing the best response: If the functional currency of a foreign subsidiary is the local currency of the country in which the foreign subsidiary operates,then

Accepted Answer

A)  only retained earnings must be remeasured into U.S.dollars. 
B)  the foreign subsidiary's financial statements must be remeasured into U.S.dollars. 
C)  only the foreign subsidiary's assets and liabilities must be remeasured into U.S.dollars 
D)  the foreign subsidiary's financial statements are translated into U.S.dollars. 
A)  only retained earnings must be remeasured into U.S.dollars. 
B)  the foreign subsidiary's financial statements must be remeasured into U.S.dollars. 
C)  only the foreign subsidiary's assets and liabilities must be remeasured into U.S.dollars 
D)  the foreign subsidiary's financial statements are translated into U.S.dollars.

Question 5

Ginza Enterprises,a subsidiary of Universal Enterprises based in Dallas,reported the following information at the end of its first year of operations (all in yen): assets--110,000,000;expenses--41,000,000;liabilities--97,500,000;capital stock--5,500,000;revenues--48,000,000.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?

Accepted Answer

A)  $21,000 debit adjustment 
B)  $76,000 debit adjustment 
C)  $21,000 credit adjustment 
D)  $76,000 credit adjustment 
A)  $21,000 debit adjustment 
B)  $76,000 debit adjustment 
C)  $21,000 credit adjustment 
D)  $76,000 credit adjustment

Question 6

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?

Accepted Answer

A)  Segment reporting 
B)  Accounting for income taxes 
C)  Accounting for impairments of assets 
D)  Accounting for research and development costs 
A)  Segment reporting 
B)  Accounting for income taxes 
C)  Accounting for impairments of assets 
D)  Accounting for research and development costs

Question 7

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

Accepted Answer

A)  current-year tax rates;use of future-years' tax rates even though enacted is prohibited. 
B)  currently-enacted tax rates for future years.. 
C)  currently-enacted tax rates for future years and future tax rates that have been announced by the government but have not yet been formally enacted into law 
D)  tax rates in effect when the temporary difference originated. 
A)  current-year tax rates;use of future-years' tax rates even though enacted is prohibited. 
B)  currently-enacted tax rates for future years.. 
C)  currently-enacted tax rates for future years and future tax rates that have been announced by the government but have not yet been formally enacted into law 
D)  tax rates in effect when the temporary difference originated.

Question 8

On July 15,2014,American Manufacturing Inc. ,a Los Angeles based conglomerate,purchased,Hunan Inc. ,a Korean-based company.Hunan Inc.'s balance sheet on the date of purchase is as follows:
   The exchange rate for Korean won on July 15,2014,is $.008.
Prepare a translated balance sheet as of July 15,2014.

Accepted Answer

The answer of On July 15,2014,American Manufacturing Inc. ,a Los...

Question 9

Current generally accepted accounting principles require that the translation of a foreign subsidiary's accounting records should be accomplished by the

Accepted Answer

A)  monetary/nonmonetary method. 
B)  current rate method. 
C)  current/noncurrent method. 
D)  functional currency method. 
A)  monetary/nonmonetary method. 
B)  current rate method. 
C)  current/noncurrent method. 
D)  functional currency method.

Question 10

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

Accepted Answer

A)  Derecognition 
B)  Fair value measurement 
C)  Accounting for income taxes 
D)  Accounting and reporting for intangible assets 
A)  Derecognition 
B)  Fair value measurement 
C)  Accounting for income taxes 
D)  Accounting and reporting for intangible assets

Question 11

Foreign currency translation adjustments arising from translation of the financial statements of a foreign subsidiary are reported in

Accepted Answer

A)  stockholders' equity of the foreign subsidiary. 
B)  revenue or expenses of the foreign subsidiary. 
C)  consolidated net income of the parent company and the foreign subsidiary. 
D)  stockholders' equity of the parent company. 
A)  stockholders' equity of the foreign subsidiary. 
B)  revenue or expenses of the foreign subsidiary. 
C)  consolidated net income of the parent company and the foreign subsidiary. 
D)  stockholders' equity of the parent company.

Question 12

Which of the following statements regarding international accounting standards for the impairment of tangible assets is correct?

Accepted Answer

A)  Impairment losses cannot be subsequently reversed. 
B)  Impairment losses can be subsequently reversed to the extent of the amount of the initial impairment loss. 
C)  International accounting standards require a two-step test of impairment of a tangible asset. 
D)  Accounting for impairments is not necessary since entities are required under international accounting standards to adjust the values of property,plant,and equipment to fair value at the end of each reporting period for which reports are prepared. 
A)  Impairment losses cannot be subsequently reversed. 
B)  Impairment losses can be subsequently reversed to the extent of the amount of the initial impairment loss. 
C)  International accounting standards require a two-step test of impairment of a tangible asset. 
D)  Accounting for impairments is not necessary since entities are required under international accounting standards to adjust the values of property,plant,and equipment to fair value at the end of each reporting period for which reports are prepared.

Question 13

Pilsner Company.converts its foreign subsidiary financial statements using the translation process.The company's subsidiary in the Czech Republic reported the following for 2014: revenues and expenses of 25,000,000 and 18,500,000 koruna,respectively,earned or incurred evenly throughout the year,dividends of 1,500,000 koruna were paid during the year.The following exchange rates are available:   Translated net income for 2014 is

Accepted Answer

A)  $148,500. 
B)  $227,500. 
C)  $175,000. 
D)  $195,000. 
A)  $148,500. 
B)  $227,500. 
C)  $175,000. 
D)  $195,000.

Question 14

Under international accounting standards,remote contingent liabilities are g. ,cosigning the loan of another party)exists.

Accepted Answer

A)  not disclosed. 
B)  not disclosed unless a guarantee arrangement (e. 
C)  disclosed if the amount of the contingent liability is reasonably estimable. 
D)  treated the same as reasonable possible contingencies. 
A)  not disclosed. 
B)  not disclosed unless a guarantee arrangement (e. 
C)  disclosed if the amount of the contingent liability is reasonably estimable. 
D)  treated the same as reasonable possible contingencies.

Question 15

The following financial information is available for Simmer Company,a hypothetical non-U.S.firm with shares listed on a U.S.stock exchange:
   If Simmer 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 Simmer's reported stockholders' equity and net income to the amounts of these items under U.S.GAAP.

Accepted Answer

The answer of The following financial information is available for...

Question 16

The SEC currently requires foreign companies that list shares on U.S.exchanges to provide

Accepted Answer

A)  both complete U.S.GAAP financial statements and a reconciliation of their reported income under non-U.S.GAAP to the reported income under U.S.GAAP. 
B)  complete U.S.GAAP financial statements or a reconciliation of their reported income under non-U.S.GAAP to reported income under U.S.GAAP. 
C)  only complete U.S.GAAP financial statements;the SEC will not accept under any circumstances only a reconciliation of an entity's reported income under non-U.S.GAAP to reported income under U.S.GAAP. 
D)  only a reconciliation of their reported income under non-U.S.GAAP to reported income under U.S.GAAP;the SEC will not accept under any circumstances only a complete set of U.S.GAAP financial statements. 
A)  both complete U.S.GAAP financial statements and a reconciliation of their reported income under non-U.S.GAAP to the reported income under U.S.GAAP. 
B)  complete U.S.GAAP financial statements or a reconciliation of their reported income under non-U.S.GAAP to reported income under U.S.GAAP. 
C)  only complete U.S.GAAP financial statements;the SEC will not accept under any circumstances only a reconciliation of an entity's reported income under non-U.S.GAAP to reported income under U.S.GAAP. 
D)  only a reconciliation of their reported income under non-U.S.GAAP to reported income under U.S.GAAP;the SEC will not accept under any circumstances only a complete set of U.S.GAAP financial statements.

Question 17

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

Accepted Answer

A)  a financing activity only. 
B)  an investing activity only. 
C)  a financing or an operating activity. 
D)  should not be shown on the statement of cash flows but rather on the income statement. 
A)  a financing activity only. 
B)  an investing activity only. 
C)  a financing or an operating activity. 
D)  should not be shown on the statement of cash flows but rather on the income statement.

Question 18

Windsor Enterprises,a subsidiary of Kennedy 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?

Accepted Answer

A)  $26,280 debit adjustment 
B)  $26,280 credit adjustment 
C)  $6,280 credit adjustment 
D)  $6,280 debit adjustment 
A)  $26,280 debit adjustment 
B)  $26,280 credit adjustment 
C)  $6,280 credit adjustment 
D)  $6,280 debit adjustment

Question 19

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

Accepted Answer

A)  an operating or a financing activity 
B)  a financing activity only. 
C)  a financing or an investing activity. 
D)  an investing activity only. 
A)  an operating or a financing activity 
B)  a financing activity only. 
C)  a financing or an investing activity. 
D)  an investing activity only.

Question 20

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

Accepted Answer

A)  Upward revaluations of property,plant,and equipment are not allowed. 
B)  The option is available for an entity to adjust upward the carrying value of property,plant,and equipment to fair value. 
C)  All entities must adjust upward the carrying value of property,plant,and equipment to fair value. 
D)  An entity has the option to adjust upward the carrying value of property,plant,and equipment to fair value,with gains and losses being shown in other comprehensive income. 
A)  Upward revaluations of property,plant,and equipment are not allowed. 
B)  The option is available for an entity to adjust upward the carrying value of property,plant,and equipment to fair value. 
C)  All entities must adjust upward the carrying value of property,plant,and equipment to fair value. 
D)  An entity has the option to adjust upward the carrying value of property,plant,and equipment to fair value,with gains and losses being shown in other comprehensive income.

Which of the following statements is correct?

Complete the following statement by choosing the best response: If the functional currency of a foreign subsidiary is the local currency of the country in which the foreign subsidiary operates,then

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

Current generally accepted accounting principles require that the translation of a foreign subsidiary's accounting records should be accomplished by the

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

Foreign currency translation adjustments arising from translation of the financial statements of a foreign subsidiary are reported in

Which of the following statements regarding international accounting standards for the impairment of tangible assets is correct?

Under international accounting standards,remote contingent liabilities are g. ,cosigning the loan of another party)exists.

The SEC currently requires foreign companies that list shares on U.S.exchanges to provide

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

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

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

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Analysis of Financial Statements

Filters

Exam 22: Accounting in a Global Market

Which of the following statements is correct?

Complete the following statement by choosing the best response: If the functional currency of a foreign subsidiary is the local currency of the country in which the foreign subsidiary operates,then

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

Current generally accepted accounting principles require that the translation of a foreign subsidiary's accounting records should be accomplished by the

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

Foreign currency translation adjustments arising from translation of the financial statements of a foreign subsidiary are reported in

Which of the following statements regarding international accounting standards for the impairment of tangible assets is correct?

Under international accounting standards,remote contingent liabilities are g. ,cosigning the loan of another party)exists.

The SEC currently requires foreign companies that list shares on U.S.exchanges to provide

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

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

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

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Analysis of Financial Statements

Filters