Question 1

Many firms find it disadvantageous to organize as a set of separate legal entities.

Accepted Answer

A) True 
 B)False

Question 2

A Danish firm raising capital in London must issue financial reports that serve the needs of its British investors in addition to its Danish financial reports.This is an example of:

Accepted Answer

A) global financial analysis. 
B) multinational fiscal coverage. 
C) international capital documentation. 
D) transnational financial reporting.

Question 3

Many firms find it advantageous to organize as a set of separate legal entities or subsidiaries because of all of the following reasons except:

Accepted Answer

A) it limits their total legal liability. 
B) to take advantage of corporate tax regulations. 
C) of legal requirements in the countries in which they do business. 
D) subsidiaries are all separate economic entities.

Question 4

What is the historic cost principle?

Accepted Answer

The answer of What is the historic cost principle?...

Question 5

A German firm raising capital by selling stock through the London Stock Exchange is an example of:

Accepted Answer

A) transnational financing. 
B) transnational development. 
C) transnational sale. 
D) transnational investment.

Question 6

It is possible that a multinational's balance sheet may not balance when it uses the temporal method to translate the accounts of a foreign subsidiary.

Accepted Answer

A) True 
 B)False

Question 7

Describe accounting in international business.What is accounting information?

Accepted Answer

The answer of Describe accounting in international business.What is accounting...

Question 8

Accounting is shaped by the environment in which it operates.

Accepted Answer

A) True 
 B)False

Question 9

A key accounting problem faced by international businesses but that does not confront purely domestic businesses is:

Accepted Answer

A) the lack of consistency in the accounting standards of different countries. 
B) the consistent,inaccurate filing of profit-and-loss statements by all international businesses. 
C) the total lack of the accounting functions in international firms. 
D) international firms not reporting their income to the government.

Question 10

Under the _____,the exchange rate at the balance sheet date is used to translate the financial statements of a foreign subsidiary into the home currency of the multinational firm.

Accepted Answer

A) temporal method 
B) current rate method 
C) operating cost accounting method 
D) historic cost principle

Question 11

The purpose of consolidated financial statements is to provide accounting information about a group of companies that recognize their economic interdependence.

Accepted Answer

A) True 
 B)False

Question 12

Developed nations tend to have far more sophisticated accounting practices than less developed countries because:

Accepted Answer

A) they have large organizations whose accounting problems are more straightforward than those of small organizations. 
B) the workforce in these countries is highly educated and skilled and can perform complex accounting functions. 
C) their accounting practices have been inherited from their former colonial rulers. 
D) their financial systems are highly controlled by their respective governments and other international regulatory bodies.

Question 13

A _____ 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) complied financial statement 
B) harmonized financial statement 
C) consolidated financial statement 
D) operating financial statement

Question 14

Foreign subsidiaries of multinational firms normally:

Accepted Answer

A) keep their accounting records in the currency of the country in which they are located. 
B) do not prepare their financial statements. 
C) prepare their financial statements in US dollars. 
D) keep their accounting records in US dollars.

Question 15

Foreign subsidiaries of multinational firms normally keep their accounting records and prepare their financial statements in US dollars.

Accepted Answer

A) True 
 B)False

Question 16

What is the temporal method used to translate the accounts of a foreign subsidiary? Explain with the help of an example.

Accepted Answer

The answer of What is the temporal method used to...

Question 17

Consolidated financial statements:

Accepted Answer

A) provide accounting information about a group of companies that recognize their economic interdependence. 
B) record transactions among the members of a corporate family. 
C) show assets,liabilities,revenues,and expenses of members of a corporate family. 
D) issue individual financial statements for the parent company and each subsidiary.

Question 18

Foreign subsidiaries operate in uniform environments.

Accepted Answer

A) True 
 B)False

Question 19

Describe the current cost accounting system.

Accepted Answer

The answer of Describe the current cost accounting system....

Question 20

_____ refers to the extent to which cultures socialize their members to accept ambiguous situations.

Accepted Answer

A) Noblesse oblige 
B) Uncertainty avoidance 
C) Social interaction 
D) Cultural dilemma

Exam 19: Accounting in the International Business

Many firms find it disadvantageous to organize as a set of separate legal entities.

A Danish firm raising capital in London must issue financial reports that serve the needs of its British investors in addition to its Danish financial reports.This is an example of:

Many firms find it advantageous to organize as a set of separate legal entities or subsidiaries because of all of the following reasons except:

What is the historic cost principle?

A German firm raising capital by selling stock through the London Stock Exchange is an example of:

It is possible that a multinational's balance sheet may not balance when it uses the temporal method to translate the accounts of a foreign subsidiary.

Describe accounting in international business.What is accounting information?

Accounting is shaped by the environment in which it operates.

A key accounting problem faced by international businesses but that does not confront purely domestic businesses is:

Under the _____,the exchange rate at the balance sheet date is used to translate the financial statements of a foreign subsidiary into the home currency of the multinational firm.

The purpose of consolidated financial statements is to provide accounting information about a group of companies that recognize their economic interdependence.

Developed nations tend to have far more sophisticated accounting practices than less developed countries because:

A _____ 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.

Foreign subsidiaries of multinational firms normally:

Foreign subsidiaries of multinational firms normally keep their accounting records and prepare their financial statements in US dollars.

What is the temporal method used to translate the accounts of a foreign subsidiary? Explain with the help of an example.

Consolidated financial statements:

Foreign subsidiaries operate in uniform environments.

Describe the current cost accounting system.

_____ refers to the extent to which cultures socialize their members to accept ambiguous situations.