International Accounting, 6th Edition By Timothy Doupnik, Mark Finn, Giorgio Gotti and Hector Perera Test bank

MULTIPLE CHOICE – Choose the one alternative that best completes the statement or answers the question.

• Which of the following groups is a supranational organization?
  • ______
    1. International Accounting Standards Board
    2. Organization for Economic Cooperation and Development
    3. International Federation of Accountants
    4. All of these answers are correct.

Question Details
AACSB :  Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Discuss the nature and scope of international accounting.
Topic : Global Accounting Standards
Source : Chapter 01 Test Bank > MC Qu. 1 Which of the following groups is…

• Determination of net present value involves:
  • ______
    1. forecasting future profits and cash flows.
    2. discounting future cash flows back to their present value.
    3. analysis on an after-tax basis.
    4. All of these answers are correct.

Question Details
AACSB :  Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 01-01 Discuss the nature and scope of international accounting.
Topic : Foreign Direct Investment
Source : Chapter 01 Test Bank > MC Qu. 2 Determination of net present value involves:…

• In which of the following levels can international accounting be defined?
  • ______
    1. Supranational organizations
    2. Company
    3. Country
    4. All of these answers are correct.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Discuss the nature and scope of international accounting.
Topic : Global Accounting Standards
Source : Chapter 01 Test Bank > MC Qu. 3 In which of the following levels…

• Which of the following functional areas is included in the study of international accounting?
  • ______
    1. Financial accounting
    2. Managerial
    3. Taxation
    4. All of these answers are correct.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-01 Discuss the nature and scope of international accounting.
Topic : Global Accounting Standards
Source : Chapter 01 Test Bank > MC Qu. 4 Which of the following functional areas…

• The factor used to convert from one country’s currency to another country’s currency is called the:
  • ______
    1. interest rate.
    2. cost of capital.
    3. exchange rate.
    4. strike price.

Question Details
AACSB :  Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Financial Reporting for Foreign Operations
Source : Chapter 01 Test Bank > MC Qu. 5 The factor used to convert from…

• 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?
  • ______
    1. Foreign exchange translation
    2. Foreign exchange risk
    3. Hedging
    4. Foreign currency options

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 6 What is the term used to…

• Foreign exchange risk arises when:
  • ______
    1. business transactions are denominated in foreign currencies.
    2. sales are made to customers in a domestic country.
    3. goods or services purchased from suppliers in a foreign country are denominated in domestic currency.
    4. auditing reports are prepared in a foreign currency.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 7 Foreign exchange risk arises when:…

• In international accounting, a “hedge” is:
  • ______
    1. a business transaction made to reduce the exposure of foreign exchange risk.
    2. the legal barriers in various divisions of a multinational company.
    3. the loss in US dollar resulting from a decline in the value of the US dollar relative to foreign currencies.
    4. a form of foreign direct investment.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 8 In international accounting, a “hedge” is:…

• Purchasing an option to buy foreign currency at a predetermined exchange rate in order to reduce exchange risk is called:
  • ______
    1. transfer pricing.
    4. cross-listing.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Hedges of Foreign Exchange Risk
Source : Chapter 01 Test Bank > MC Qu. 9 Purchasing an option to buy foreign…

• What term is used to describe the process of reducing foreign exchange risk?
  • ______
    1. International accounting
    2. Exposure
    3. Hedging
    4. Globalization

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Hedges of Foreign Exchange Risk
Source : Chapter 01 Test Bank > MC Qu. 10 What term is used to describe…

• What is the advantage of foreign direct investment?
  • ______
    1. Helps in retaining advantage over competition
    2. Reduces transportation costs
    3. Creates a company tailored to a foreign market’s unique characteristics
    4. All of these answers are correct.

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-03 Explain the reasons for; and the accounting issues associated with; foreig
Topic : Foreign Direct Investment
Source : Chapter 01 Test Bank > MC Qu. 11 What is the advantage of foreign…

• How should we recognize the difference in the value of a receivable in a foreign currency at the time it was recorded and the time the cash was received?
  • ______
    1. As an adjustment to stockholders’ equity
    2. As an adjustment to purchases
    3. As an extraordinary capital expenditure
    4. As a prior period adjustment

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 3 Hard
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 12 How should we recognize the difference…

• What currency is used in the United Kingdom?
  • ______
    1. Crown
    2. Euro
    3. British pound
    4. UK dollar

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Remember
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 13 What currency is used in the…

• Which of these European countries does NOT use the Euro as its domestic currency?
  • ______
    1. France
    2. United Kingdom
    3. Ireland
    4. The Netherlands

Question Details
AACSB :  Knowledge Application
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Remember
Difficulty : 2 Medium
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Sales to Customers
Source : Chapter 01 Test Bank > MC Qu. 14 Which of these European countries does…

• Which of the following terms is used to describe the combining of the financial statements of all subsidiaries, both foreign and domestic, into the financial statements of the parent?
  • ______
    1. Convergence
    2. Hedging
    3. Consolidation
    4. Incorporation

Question Details
AACSB :  Reflective Thinking
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Bloom’s : Understand
Difficulty : 1 Easy
Gradable : automatic
Learning Objective : 01-02 Describe accounting issues confronted by companies involved in internation
Topic : Financial Reporting for Foreign Operations
Source : Chapter 01 Test Bank > MC Qu. 15 Which of the following terms is…