Test Bank: International Accounting (6th Edition) by Timothy Doupnik – Chapters 1-12 (All Answers Included

TESTV BANKV FOR
InternationalVAccounting,V6thVEditionVbyVTimothyVDoupnik
ChapterV1-12
✅
AnswersVIncluded
ChapterV01V6e
1) WhichVofVtheVfollowingVgroupsVisVaVsupranationalVorganiza
tion?
A) InternationalVAccountingVStandardsVBoard
B) OrganizationVforVEconomicVCooperationVandVDevelopment
C) InternationalVFederationVofVAccountants
D) AllVofVtheseVanswersVareVcorrect.


2) DeterminationVofVnetVpresentVvalueVinvolves:
A) forecastingVfutureVprofitsVandVcashVflows.
B) discountingVfutureVcashVflowsVbackVtoVtheirVpresentVvalue.
C) analysisVonVanVafter-taxVbasis.
D) AllVofVtheseVanswersVareVcorrect.



3) InVwhichVofVtheVfollowingVlevelsVcanVinternationalVaccountingVbeVdefined?
A) SupranationalVorganizations
B) Company
C) Country
D) AllVofVtheseVanswersVareVcorrect.



4) WhichVofVtheVfollowingVfunctionalVareasVisVincludedVinVtheVstudyVofVinternationalVaccountin
g?
A) FinancialVaccounting
B) Managerial
C) Taxation
D) AllVofVtheseVanswersVareVcorrect.


5) TheVfactorVusedVtoVconvertVfromVoneVcountry'sVcurrencyVtoVanotherVcountry'sVcurrencyVi
sVcalledVthe:
A) interestVrate.
B) costVofVcapital.
C) exchangeVrate.
D) strikeVprice.



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,6) WhatVisVtheVtermVusedVtoVdescribeVtheVpossibilityVthatVaVforeignVcurrencyVwillVdecreas
eVinVU.S.VdollarVvalueVoverVtheVlifeVofVanVassetVsuchVasVAccountsVReceivable?
A) ForeignVexchangeVtranslation
B) ForeignVexchangeVrisk
C) Hedging
D) ForeignVcurrencyVoptions



7) ForeignVexchangeVriskVarisesVwhen:
A) businessVtransactionsVareVdenominatedVinVforeignVcurrencies.
B) salesVareVmadeVtoVcustomersVinVaVdomesticVcountry.
C) goodsVorVservicesVpurchasedVfromVsuppliersVinVaVforeignVcountryVareVdenomin
atedVinVdomesticVcurrency.
D) auditingVreportsVareVpreparedVinVaVforeignVcurrency.



8) InVinternationalVaccounting,VaV"hedge"Vis:
A) aVbusinessVtransactionVmadeVtoVreduceVtheVexposureVofVforeignVexchangeVrisk.
B) theVlegalVbarriersVinVvariousVdivisionsVofVaVmultinationalVcompany.
C) theVlossVinVUSVdollarVresultingVfromVaVdeclineVinVtheVvalueVofVtheVUSVdollarVr
elativeVtoVforeignVcurrencies.
D) aVformVofVforeignVdirectVinvestment.



9) PurchasingVanVoptionVtoVbuyVforeignVcurrencyVatVaVpredeterminedVexchangeVrateVinV
orderVtoVreduceVexchangeVriskVisVcalled:
A) transferVpricing.
B) hedging.
C) translating.
D) cross-listing.



10) WhatVtermVisVusedVtoVdescribeVtheVprocessVofVreducingVforeignVexchangeVrisk?
A) InternationalVaccounting
B) Exposure
C) Hedging
D) Globalization




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,11) WhatVisVtheVadvantageVofVforeignVdirectVinvestment?
A) HelpsVinVretainingVadvantageVoverVcompetition
B) ReducesVtransportationVcosts
C) CreatesVaVcompanyVtailoredVtoVaVforeignVmarket'sVuniqueVcharacteristics
D) AllVofVtheseVanswersVareVcorrect.



12) HowVshouldVweVrecognizeVtheVdifferenceVinVtheVvalueVofVaVreceivableVinVaVforeignVcu
rrencyVatVtheVtimeVitVwasVrecordedVandVtheVtimeVtheVcashVwasVreceived?
A) AsVanVadjustmentVtoVstockholders'Vequity
B) AsVanVadjustmentVtoVpurchases
C) AsVanVextraordinaryVcapitalVexpenditure
D) AsVaVpriorVperiodVadjustment



13) WhatVcurrencyVisVusedVinVtheVUnitedVKingdom?
A) Crown
B) Euro
C) BritishVpound
D) UKVdollar



14) WhichVofVtheseVEuropeanVcountriesVdoesVNOTVuseVtheVEuroVasVitsVdomesticVcurrency?
A) France
B) UnitedVKingdom
C) Ireland
D) TheVNetherlands



15) WhichVofVtheVfollowingVtermsVisVusedVtoVdescribeVtheVcombiningVofVtheVfinancialVstate
mentsVofVallVsubsidiaries,VbothVforeignVandVdomestic,VintoVtheVfinancialVstatementsVofVt
heVparent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation




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, 16) WhyVisVauditingVaVmultinationalVcorporationVpotentiallyVmoreVdifficultVthanVauditingVan
VentityVthatVhasVonlyVdomesticVoperations?
A) LanguageVdifferences
B) CulturalVdifferences
C) MultipleVsetsVofVaccountingVstandards
D) AllVofVtheseVanswersVareVcorrect.


17) WhatVisVtheVentryVpointVforVmostVcompaniesVintoVtheVworldVofVinternationalVbusiness?
A) TransferVpricing
B) Exporting
C) ForeignVdirectVinvestment
D) Cross-listingVonVinternationalVstockVexchanges



18) ForVaVU.S.VmultinationalVcorporation,VconsolidatingVtheVfinancialVstatementsVofVfor
eignVsubsidiariesVrequiresVtwoVsteps.VFirst,VtheVforeignVsubsidiary'sVstatementsVmust
VbeVrestatedVaccordingVtoVtheVU.S.VGAAP.VTheVnextVstepVisVto:

A) convertVtheVaccountVbalancesVintoVU.S.Vdollars.
B) determineVtheVexchangeVrateVgainVorVloss.
C) calculateVtheVtranslationVadjustment.
D) restateVtheVincomeVusingVinternationalVaccountingVstandards.



19) WhenVsettingVtransferVpricesVamongVinternationalVsubsidiaries,VtheVcorporationVmust:
A) makeVsureVthatVtheVtotalVtaxVisVminimized.
B) ensureVthatVtheVtransferVpricesVareVacceptableVtoVtheVtaxingVauthoritiesVinVtheVc
ountriesVinvolved.
C) doVwhateverVitVtakesVtoVmakeVtaxesVpaidVinVtheVUnitedVStatesVasVlowVasVpossible.
D) followVtheVtransferVpricingVpolicyVusedVforVdomesticVtransfers.



20) WhatVisVtheVprimaryVprovisionVofVtheVForeignVCorruptVPracticesVAct?
A) ToVspecifyVwhichVcorruptVpracticesVareVacceptableVunderVU.S.Vlaw
B) ToVspecifyVhowVtoVaccountVforVbribesVpaidVbyVU.S.VcorporationsVtoVobtainVb
usinessVfromVforeignVgovernments
C) ToVinformVinternalVauditorsVhowVtoVdetectVfraudVinVmultinationalVcorporations
D) ToVprohibitVU.S.VcompaniesVfromVpayingVbribesVtoVforeignVgovernmentVoffic
ialsVtoVobtainVbusiness




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