MGT 302 FINAL EXAM QUESTIONS AND ANSWERS

MGT 302 FINAL EXAM QUESTIONS AND ANSWERS Chapter 20 Accounting and Finance in the International Business Answer Key True / False Questions 1. Accounting information is the means by which firms communicate their financial position to the providers of capital. TRUE Accounting information is the means by which firms communicate their financial position to the providers of capital, enabling them to assess the value of their investments and make decisions about future resource allocations. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Discuss the national differences in accounting standards. Topic: Introduction 2. Accounting is shaped by the environment in which it operates. TRUE Accounting is shaped by the environment in which it operates. Just as different countries have different political systems, economic systems, and cultures, historically they have also had different accounting systems. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Discuss the national differences in accounting standards. Topic: National Differences in Accounting Standards 3. Banks are the most important source of external capital for business enterprises in the United States. FALSE In countries where there are well-developed capital markets, such as the United States and Britain, firms typically raise capital by issuing stock or bonds to investors. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Discuss the national differences in accounting standards. Topic: National Differences in Accounting Standards 4. Accounting standards are rules for preparing financial statements. TRUE Accounting standards are rules for preparing financial statements. They define what is useful accounting information. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Discuss the national differences in accounting standards. Topic: National Differences in Accounting Standards 5. Auditing standards are rules that define the accounting principles and monetary policy of a nation. FALSE Auditing standards specify the rules for performing an audit—the technical process by which an independent person (the auditor) gathers evidence for determining if financial accounts conform to required accounting standards and if they are also reliable. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Discuss the national differences in accounting standards. To