International Accounting 6th Edition by Doupnik – Complete Test Bank (Chapters 1–12) With Answers

TEST BANK FOR
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InternationalAccounting,6thEditionbyTimothy Doupnik
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Chapter 1-12.




Answers Included
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Chapter 01 6e . .


1) Which.of.the.following.groups.is.a.supranational.organization?
A) International.Accounting.Standards.Board
B) Organization.for.Economic.Cooperation.and.Development
C) International.Federation.of.Accountants
D) All.of.these.answers.are.correct.



2) Determination.of.net.present.value.involves:
A) forecasting.future.profits.and.cash.flows.
B) discounting.future.cash.flows.back.to.their.present.value.
C) analysis.on.an.after-tax.basis.
D) All.of.these.answers.are.correct.



3) In.which.of.the.following.levels.can.international.accounting.be.defined?
A) Supranational.organizations
B) Company
C) Country
D) All.of.these.answers.are.correct.



4) Which.of.the.following.functional.areas.is.included.in.the.study.of.international.accounting?
A) Financial.accounting
B) Managerial
C) Taxation
D) All.of.these.answers.are.correct.



5) The.factor.used.to.convert.from.one.country's.currency.to.another.country's.currency.is.called.the:
A) interest.rate.
B) cost.of.capital.
C) exchange.rate.
D) strike.price.




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,6) What.is.the.term.used.to.describe.the.possibility.that.a.foreign.currency.will.decrease.in.U.S..dollar
. value.over.the.life.of.an.asset.such.as.Accounts.Receivable?
A) Foreign.exchange.translation
B) Foreign.exchange.risk
C) Hedging
D) Foreign.currency.options



7) Foreign.exchange.risk.arises.when:
A) business.transactions.are.denominated.in.foreign.currencies.
B) sales.are.made.to.customers.in.a.domestic.country.
C) goods.or.services.purchased.from.suppliers.in.a.foreign.country.are.denominated.in.dom
estic.currency.
D) auditing.reports.are.prepared.in.a.foreign.currency.



8) In.international.accounting,.a."hedge".is:
A) a.business.transaction.made.to.reduce.the.exposure.of.foreign.exchange.risk.
B) the.legal.barriers.in.various.divisions.of.a.multinational.company.
C) the.loss.in.US.dollar.resulting.from.a.decline.in.the.value.of.the.US.dollar.relative.to.foreig
n.currencies.
D) a.form.of.foreign.direct.investment.



9) Purchasing.an.option.to.buy.foreign.currency.at.a.predetermined.exchange.rate.in.order.to.redu
ce.exchange.risk.is.called:
A) transfer.pricing.
B) hedging.
C) translating.
D) cross-listing.



10) What.term.is.used.to.describe.the.process.of.reducing.foreign.exchange.risk?
A) International.accounting
B) Exposure
C) Hedging
D) Globalization




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,11) What.is.the.advantage.of.foreign.direct.investment?
A) Helps.in.retaining.advantage.over.competition
B) Reduces.transportation.costs
C) Creates.a.company.tailored.to.a.foreign.market's.unique.characteristics
D) All.of.these.answers.are.correct.



12) How.should.we.recognize.the.difference.in.the.value.of.a.receivable.in.a.foreign.currency.at.the.ti
me.it.was.recorded.and.the.time.the.cash.was.received?
A) As.an.adjustment.to.stockholders'.equity
B) As.an.adjustment.to.purchases
C) As.an.extraordinary.capital.expenditure
D) As.a.prior.period.adjustment



13) What.currency.is.used.in.the.United.Kingdom?
A) Crown
B) Euro
C) British.pound
D) UK.dollar



14) Which.of.these.European.countries.does.NOT.use.the.Euro.as.its.domestic.currency?
A) France
B) United.Kingdom
C) Ireland
D) The.Netherlands



15) Which.of.the.following.terms.is.used.to.describe.the.combining.of.the.financial.statements.of.all.su
bsidiaries,.both.foreign.and.domestic,.into.the.financial.statements.of.the.parent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation




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, 16) Why.is.auditing.a.multinational.corporation.potentially.more.difficult.than.auditing.an.entity.that.
has.only.domestic.operations?
A) Language.differences
B) Cultural.differences
C) Multiple.sets.of.accounting.standards
D) All.of.these.answers.are.correct.



17) What.is.the.entry.point.for.most.companies.into.the.world.of.international.business?
A) Transfer.pricing
B) Exporting
C) Foreign.direct.investment
D) Cross-listing.on.international.stock.exchanges



18) For.a.U.S..multinational.corporation,.consolidating.the.financial.statements.of.foreign.subsi
diaries.requires.two.steps..First,.the.foreign.subsidiary's.statements.must.be.restated.accordin
g.to.the.U.S..GAAP..The.next.step.is.to:
A) convert.the.account.balances.into.U.S..dollars.
B) determine.the.exchange.rate.gain.or.loss.
C) calculate.the.translation.adjustment.
D) restate.the.income.using.international.accounting.standards.



19) When.setting.transfer.prices.among.international.subsidiaries,.the.corporation.must:
A) make.sure.that.the.total.tax.is.minimized.
B) ensure.that.the.transfer.prices.are.acceptable.to.the.taxing.authorities.in.the.countries.invo
lved.
C) do.whatever.it.takes.to.make.taxes.paid.in.the.United.States.as.low.as.possible.
D) follow.the.transfer.pricing.policy.used.for.domestic.transfers.



20) What.is.the.primary.provision.of.the.Foreign.Corrupt.Practices.Act?
A) To.specify.which.corrupt.practices.are.acceptable.under.U.S..law
B) To.specify.how.to.account.for.bribes.paid.by.U.S..corporations.to.obtain.business.from
foreign.governments
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C) To.inform.internal.auditors.how.to.detect.fraud.in.multinational.corporations
D) To.prohibit.U.S..companies.from.paying.bribes.to.foreign.government.officials.to.obt
ain.business




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