TEST BANK FOR
j j
InternationaljAccounting,j6thjEditionjbyjTimothyjDoupnik
Chapterj1-12
✅
AnswersjIncluded
Chapterj01j6e
1) Whichjofjthejfollowingjgroupsjisjajsupranationaljorganization?
A) InternationaljAccountingjStandardsjBoard
B) OrganizationjforjEconomicjCooperationjandjDevelopment
C) InternationaljFederationjofjAccountants
D) Alljofjthesejanswersjarejcorrect.
2) Determinationjofjnetjpresentjvaluejinvolves:
A) forecastingjfuturejprofitsjandjcashjflows.
B) discountingjfuturejcashjflowsjbackjtojtheirjpresentjvalue.
C) analysisjonjanjafter-taxjbasis.
D) Alljofjthesejanswersjarejcorrect.
3) Injwhichjofjthejfollowingjlevelsjcanjinternationaljaccountingjbejdefined?
A) Supranationaljorganizations
B) Company
C) Country
D) Alljofjthesejanswersjarejcorrect.
4) Whichjofjthejfollowingjfunctionaljareasjisjincludedjinjthejstudyjofjinternationaljaccounting?
A) Financialjaccounting
B) Managerial
C) Taxation
D) Alljofjthesejanswersjarejcorrect.
5) Thejfactorjusedjtojconvertjfromjonejcountry'sjcurrencyjtojanotherjcountry'sjcurrencyjisjcalledjthe
:
A) interestjrate.
B) costjofjcapital.
C) exchangejrate.
D) strikejprice.
1
,6) WhatjisjthejtermjusedjtojdescribejthejpossibilityjthatjajforeignjcurrencyjwilljdecreasejinjU.S.jdol
larjvaluejoverjthejlifejofjanjassetjsuchjasjAccountsjReceivable?
A) Foreignjexchangejtranslation
B) Foreignjexchangejrisk
C) Hedging
D) Foreignjcurrencyjoptions
7) Foreignjexchangejriskjarisesjwhen:
A) businessjtransactionsjarejdenominatedjinjforeignjcurrencies.
B) salesjarejmadejtojcustomersjinjajdomesticjcountry.
C) goodsjorjservicesjpurchasedjfromjsuppliersjinjajforeignjcountryjarejdenominatedjinjdo
mesticjcurrency.
D) auditingjreportsjarejpreparedjinjajforeignjcurrency.
8) Injinternationaljaccounting,jaj"hedge"jis:
A) ajbusinessjtransactionjmadejtojreducejthejexposurejofjforeignjexchangejrisk.
B) thejlegaljbarriersjinjvariousjdivisionsjofjajmultinationaljcompany.
C) thejlossjinjUSjdollarjresultingjfromjajdeclinejinjthejvaluejofjthejUSjdollarjrelativejtojfor
eignjcurrencies.
D) ajformjofjforeignjdirectjinvestment.
9) Purchasingjanjoptionjtojbuyjforeignjcurrencyjatjajpredeterminedjexchangejratejinjorderjtojre
ducejexchangejriskjisjcalled:
A) transferjpricing.
B) hedging.
C) translating.
D) cross-listing.
10) Whatjtermjisjusedjtojdescribejthejprocessjofjreducingjforeignjexchangejrisk?
A) Internationaljaccounting
B) Exposure
C) Hedging
D) Globalization
2
,11) Whatjisjthejadvantagejofjforeignjdirectjinvestment?
A) Helpsjinjretainingjadvantagejoverjcompetition
B) Reducesjtransportationjcosts
C) Createsjajcompanyjtailoredjtojajforeignjmarket'sjuniquejcharacteristics
D) Alljofjthesejanswersjarejcorrect.
12) Howjshouldjwejrecognizejthejdifferencejinjthejvaluejofjajreceivablejinjajforeignjcurrencyjatjthej
timejitjwasjrecordedjandjthejtimejthejcashjwasjreceived?
A) Asjanjadjustmentjtojstockholders'jequity
B) Asjanjadjustmentjtojpurchases
C) Asjanjextraordinaryjcapitaljexpenditure
D) Asjajpriorjperiodjadjustment
13) WhatjcurrencyjisjusedjinjthejUnitedjKingdom?
A) Crown
B) Euro
C) Britishjpound
D) UKjdollar
14) WhichjofjthesejEuropeanj countriesjdoesjNOTjusejthejEurojasjitsjdomesticjcurrency?
A) France
B) UnitedjKingdom
C) Ireland
D) ThejNetherlands
15) Whichjofjthejfollowingjtermsjisjusedjtojdescribejthejcombiningjofjthejfinancialjstatementsjofjallj
subsidiaries,jbothjforeignjandjdomestic,jintojthejfinancialjstatementsjofjthejparent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
3
, 16) Whyjisjauditingjajmultinationaljcorporationjpotentiallyjmorejdifficultjthanjauditingjanjentityjth
atjhasjonlyjdomesticjoperations?
A) Languagejdifferences
B) Culturaljdifferences
C) Multiplejsetsjofjaccountingjstandards
D) Alljofjthesejanswersjarejcorrect.
17) Whatjisjthejentryjpointjforjmostjcompaniesjintojthejworldjofjinternationaljbusiness?
A) Transferjpricing
B) Exporting
C) Foreignjdirectjinvestment
D) Cross-listingjonjinternationaljstockjexchanges
18) ForjajU.S.jmultinationaljcorporation,jconsolidatingjthejfinancialjstatementsjofjforeignjsub
sidiariesjrequiresjtwojsteps.jFirst,jthejforeignjsubsidiary'sjstatementsjmustjbejrestatedjaccor
dingjtojthejU.S.jGAAP.jThejnextjstepjisjto:
A) convertjthejaccountjbalancesjintojU.S.jdollars.
B) determinejthejexchangejratejgainjorjloss.
C) calculatejthejtranslationjadjustment.
D) restatejthejincomejusingjinternationaljaccountingjstandards.
19) Whenjsettingjtransferjpricesjamongjinternationaljsubsidiaries,jthejcorporationjmust:
A) makejsurejthatjthejtotaljtaxjisjminimized.
B) ensurejthatjthejtransferjpricesjarejacceptablejtojthejtaxingjauthoritiesjinjthejcountriesjin
volved.
C) dojwhateverjitjtakesjtojmakejtaxesjpaidjinjthejUnitedjStatesjasjlowjasjpossible.
D) followjthejtransferjpricingjpolicyjusedjforjdomesticjtransfers.
20) WhatjisjthejprimaryjprovisionjofjthejForeignjCorruptjPracticesjAct?
A) TojspecifyjwhichjcorruptjpracticesjarejacceptablejunderjU.S.jlaw
B) TojspecifyjhowjtojaccountjforjbribesjpaidjbyjU.S.jcorporationsjtojobtainjbusinessjfro
mjforeignjgovernments
C) Tojinformjinternaljauditorsjhowjtojdetectjfraudjinjmultinationaljcorporations
D) TojprohibitjU.S.jcompaniesjfromjpayingjbribesjtojforeignjgovernmentjofficialsjtojob
tainjbusiness
4
j j
InternationaljAccounting,j6thjEditionjbyjTimothyjDoupnik
Chapterj1-12
✅
AnswersjIncluded
Chapterj01j6e
1) Whichjofjthejfollowingjgroupsjisjajsupranationaljorganization?
A) InternationaljAccountingjStandardsjBoard
B) OrganizationjforjEconomicjCooperationjandjDevelopment
C) InternationaljFederationjofjAccountants
D) Alljofjthesejanswersjarejcorrect.
2) Determinationjofjnetjpresentjvaluejinvolves:
A) forecastingjfuturejprofitsjandjcashjflows.
B) discountingjfuturejcashjflowsjbackjtojtheirjpresentjvalue.
C) analysisjonjanjafter-taxjbasis.
D) Alljofjthesejanswersjarejcorrect.
3) Injwhichjofjthejfollowingjlevelsjcanjinternationaljaccountingjbejdefined?
A) Supranationaljorganizations
B) Company
C) Country
D) Alljofjthesejanswersjarejcorrect.
4) Whichjofjthejfollowingjfunctionaljareasjisjincludedjinjthejstudyjofjinternationaljaccounting?
A) Financialjaccounting
B) Managerial
C) Taxation
D) Alljofjthesejanswersjarejcorrect.
5) Thejfactorjusedjtojconvertjfromjonejcountry'sjcurrencyjtojanotherjcountry'sjcurrencyjisjcalledjthe
:
A) interestjrate.
B) costjofjcapital.
C) exchangejrate.
D) strikejprice.
1
,6) WhatjisjthejtermjusedjtojdescribejthejpossibilityjthatjajforeignjcurrencyjwilljdecreasejinjU.S.jdol
larjvaluejoverjthejlifejofjanjassetjsuchjasjAccountsjReceivable?
A) Foreignjexchangejtranslation
B) Foreignjexchangejrisk
C) Hedging
D) Foreignjcurrencyjoptions
7) Foreignjexchangejriskjarisesjwhen:
A) businessjtransactionsjarejdenominatedjinjforeignjcurrencies.
B) salesjarejmadejtojcustomersjinjajdomesticjcountry.
C) goodsjorjservicesjpurchasedjfromjsuppliersjinjajforeignjcountryjarejdenominatedjinjdo
mesticjcurrency.
D) auditingjreportsjarejpreparedjinjajforeignjcurrency.
8) Injinternationaljaccounting,jaj"hedge"jis:
A) ajbusinessjtransactionjmadejtojreducejthejexposurejofjforeignjexchangejrisk.
B) thejlegaljbarriersjinjvariousjdivisionsjofjajmultinationaljcompany.
C) thejlossjinjUSjdollarjresultingjfromjajdeclinejinjthejvaluejofjthejUSjdollarjrelativejtojfor
eignjcurrencies.
D) ajformjofjforeignjdirectjinvestment.
9) Purchasingjanjoptionjtojbuyjforeignjcurrencyjatjajpredeterminedjexchangejratejinjorderjtojre
ducejexchangejriskjisjcalled:
A) transferjpricing.
B) hedging.
C) translating.
D) cross-listing.
10) Whatjtermjisjusedjtojdescribejthejprocessjofjreducingjforeignjexchangejrisk?
A) Internationaljaccounting
B) Exposure
C) Hedging
D) Globalization
2
,11) Whatjisjthejadvantagejofjforeignjdirectjinvestment?
A) Helpsjinjretainingjadvantagejoverjcompetition
B) Reducesjtransportationjcosts
C) Createsjajcompanyjtailoredjtojajforeignjmarket'sjuniquejcharacteristics
D) Alljofjthesejanswersjarejcorrect.
12) Howjshouldjwejrecognizejthejdifferencejinjthejvaluejofjajreceivablejinjajforeignjcurrencyjatjthej
timejitjwasjrecordedjandjthejtimejthejcashjwasjreceived?
A) Asjanjadjustmentjtojstockholders'jequity
B) Asjanjadjustmentjtojpurchases
C) Asjanjextraordinaryjcapitaljexpenditure
D) Asjajpriorjperiodjadjustment
13) WhatjcurrencyjisjusedjinjthejUnitedjKingdom?
A) Crown
B) Euro
C) Britishjpound
D) UKjdollar
14) WhichjofjthesejEuropeanj countriesjdoesjNOTjusejthejEurojasjitsjdomesticjcurrency?
A) France
B) UnitedjKingdom
C) Ireland
D) ThejNetherlands
15) Whichjofjthejfollowingjtermsjisjusedjtojdescribejthejcombiningjofjthejfinancialjstatementsjofjallj
subsidiaries,jbothjforeignjandjdomestic,jintojthejfinancialjstatementsjofjthejparent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
3
, 16) Whyjisjauditingjajmultinationaljcorporationjpotentiallyjmorejdifficultjthanjauditingjanjentityjth
atjhasjonlyjdomesticjoperations?
A) Languagejdifferences
B) Culturaljdifferences
C) Multiplejsetsjofjaccountingjstandards
D) Alljofjthesejanswersjarejcorrect.
17) Whatjisjthejentryjpointjforjmostjcompaniesjintojthejworldjofjinternationaljbusiness?
A) Transferjpricing
B) Exporting
C) Foreignjdirectjinvestment
D) Cross-listingjonjinternationaljstockjexchanges
18) ForjajU.S.jmultinationaljcorporation,jconsolidatingjthejfinancialjstatementsjofjforeignjsub
sidiariesjrequiresjtwojsteps.jFirst,jthejforeignjsubsidiary'sjstatementsjmustjbejrestatedjaccor
dingjtojthejU.S.jGAAP.jThejnextjstepjisjto:
A) convertjthejaccountjbalancesjintojU.S.jdollars.
B) determinejthejexchangejratejgainjorjloss.
C) calculatejthejtranslationjadjustment.
D) restatejthejincomejusingjinternationaljaccountingjstandards.
19) Whenjsettingjtransferjpricesjamongjinternationaljsubsidiaries,jthejcorporationjmust:
A) makejsurejthatjthejtotaljtaxjisjminimized.
B) ensurejthatjthejtransferjpricesjarejacceptablejtojthejtaxingjauthoritiesjinjthejcountriesjin
volved.
C) dojwhateverjitjtakesjtojmakejtaxesjpaidjinjthejUnitedjStatesjasjlowjasjpossible.
D) followjthejtransferjpricingjpolicyjusedjforjdomesticjtransfers.
20) WhatjisjthejprimaryjprovisionjofjthejForeignjCorruptjPracticesjAct?
A) TojspecifyjwhichjcorruptjpracticesjarejacceptablejunderjU.S.jlaw
B) TojspecifyjhowjtojaccountjforjbribesjpaidjbyjU.S.jcorporationsjtojobtainjbusinessjfro
mjforeignjgovernments
C) Tojinformjinternaljauditorsjhowjtojdetectjfraudjinjmultinationaljcorporations
D) TojprohibitjU.S.jcompaniesjfromjpayingjbribesjtojforeignjgovernmentjofficialsjtojob
tainjbusiness
4
