All our Essay orders are Original, and are written from scratch. Try us today at 30% off

International Accounting

Want answers to the assignment Below?

Text or Whatsapp Olivia at +1 (307) 209-4351


50 Multiple Choice questions and 1 essay question.


Test1 International Accounting Chapters 1 – 5, and 8

1. What is a “greenfield” investment?

            A)  Farm land held for speculation

            B)   Foreign direct investment whereby a new facility is constructed abroad

            C)   Purchasing an existing facility as a foreign direct investment

            D)  A foreign investment that has been approved by the Environmental Protection Agency

      2.   The ownership and control of foreign assets such as a manufacturing plant is called:

            A)  a hedge.

            B)   foreign direct investment.

            C)   exposure.

            D)  derivatives.

      3.   Which of the following is a reason for foreign direct investment?

            A)  Reduce costs of doing business

            B)   Protect domestic markets

            C)   Protect foreign markets

            D)  All of the above

      4.   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.

      5.   What is the term used to describe the possibility that a foreign currency will decrease in US $ 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

      6.   Foreign exchange risk arises when:

            A)  business transactions are denominated in foreign currencies.

            B)   sales are made to customers in a foreign country.

            C)   goods or services are purchased from suppliers in a foreign country.

            D)  accounting reports are prepared in a foreign currency.

      7.   As used in international accounting, a “hedge” is:

            A)  a business transaction made to reduce the exposure of foreign exchange risk.

            B)   the legal barrier between the various divisions of a multinational company.

            C)   the loss in US $ resulting from a decline in the value of the US $ relative to foreign currencies.

            D)  one form of foreign direct investment.

      8.   Which of the following is an example of a greenfield investment?

            A)  Nike contracts with a footwear company in China to make athletic shoes.

            B)   A Chinese oil company buys a U.S. oil company.

            C)   Toyota, a Japanese automaker, builds an assembly plant in Ohio.

            D)  Daimler, a German automaker, merges with Chrysler, a U.S. automaker.

9. The process by which a domestic company sells its stock, already sold on its domestic exchange, on a foreign stock exchange is known as:

            A)  SEC registration

            B)   Initial public offering

            C)   Consolidation

            D)  Cross-listing

10. Which of the following is not a problem caused by accounting diversity?

            A)  Lack of qualified international auditors

            B)   Preparation of consolidated financial statements

            C)   Access to foreign capital markets

            D)  Comparability of financial statements

    11.   Differences in legal systems used in various countries have been cited as one reason for diversity in accounting practice.  What are the major types of legal systems?

            A)  commercial law and accounting law

            B)   rules and regulations

            C)   written law and unwritten law

            D)  common law and code law

    12.   In code law countries such as Germany, France, and Japan, tax law and accounting standards tend to be:

            A)  unrelated.

            B)   very different.

            C)   similar.

            D)  more confusing than those in the U.S.

13. What does “harmonization” mean in the context of international accounting?

            A)  The process of combining the financial statements of foreign subsidiaries into the parent company’s financial statements

            B)   Reducing the diversity of accounting standards

            C)   Disclosing the accounting methods used in preparing the financial statements

            D)  Assessing the exposure resulting from inadequate internal controls

14. The accounting standards in code law countries tend to be:

            A)  very detailed.

            B)   formulated by organizations such as the FASB.

            C)   stated broadly without much guidance on accounting procedures.

            D)  very conservative.

15. What is likely to be the source of accounting standards in common law countries?

            A)  Tax law

            B)   Non-government entities such as the FASB

            C)   Federal and local legislatures

            D)  The International Accounting Standards Board

16. In countries such as the U. S., there is great demand for public disclosure of accounting information.  What is the reason for this?

            A)  Corporate management isn’t trustworthy.

            B)   Businesses rely heavily on financing through issuance of stock to the public.

            C)   The American populace is better able to read financial statements than people in other countries.

            D)  U.S. government officials are generally members of corporate boards of directors and can get all the information they require.

17. Which of the following statements is true about accounting convergence?

            A)  Convergence is a synonym for harmonization.

            B)   Convergence is the opposite of standardization.

            C)   Convergence, unlike harmonization, takes place over a period of time.

            D)  Convergence means developing high-quality standards in partnership with national standard-setters.

18. What basis does the International Accounting Standards Board use in formulating its IFRS?

            A)  Detailed rules to govern accounting practice

            B)   A framework of accounting principles

            C)   Typical tax laws of western nations

            D)  Exceptions or unusual circumstances that require special attention

19. Why does the IASB believe that a principles-based approach to standard setting is superior to a rules-based perspective?

            A)  Detailed prescriptions or rules encourage accountants to look for ways to circumvent the rules rather than trying to provide useful information.

            B)   Principles-based standard setting is less costly to undertake than rules-based standard formulation.

            C)   It is desirable to have all corporations in all countries using the same accounting practice.

            D)  A conceptual framework for standard setting has been demonstrated to encourage the greatest economic development.

20. Which of the following statements is true about the IASB’s approach to accounting standard setting?

            A)  The IASB approach is very similar to the rules-oriented basis favored by the FASB in the United States.

            B)   The IASB uses a principles-based approach to standards formulation.

            C)   The IASB pronouncements have been called a “cookbook” of accounting standards.

            D)  The Sarbanes-Oxley Act requires the FASB to move toward the approach for standard setting used by the IASB.

21.  In what way does IAS 16 (Property, Plant, & Equipment) differ from U.S. GAAP concerning fixed asset measurement subsequent to initial recognition?

            A)  IAS 16 allows for upward revaluation of the asset based on fair value.

            B)   IAS 16 does not allow accumulated depreciation to be shown on the balance sheet.

            C)   IAS 16 requires that fixed assets be carried at fair value less accumulated impairment losses.

            D)  IAS 16 allows both upward and downward revaluation of fixed assets, whereas U.S. GAAP only allows upward revaluation.

    22.   In November 2007 which organization removed the requirement that foreign private issuers reconcile their financial statements to U.S. GAAP?

            A)  IASB

            B)   EU

            C)   SEC

            D)  FASB

23. Which of the following is NOT a way in which a country might adopt IFRS?

            A)  All companies in that country adopt IFRS.

            B)   Foreign companies listed on domestic exchanges adopt IFRS.

            C)   IASB forces them to adopt IFRS.

            D)  Domestic companies that list on foreign exchanges adopt IFRS.

    24.   What was the “Norwalk Agreement?”

            A)  A pledge between the Financial Accounting Standards Board in the U.S. and the IASB to make their reporting standards compatible

            B)   A concession by the Financial Accounting Standards Board in the U.S. to adopt IFRS as soon as possible

            C)   It is a treaty between the United States and the European Union to make their accounting standards converge.

            D)  It was an agreement signed in Norwalk, Connecticut in 2002 to make English the official language of the IASB.

    25.   Which of the following is not a major concern related to convergence of international accounting standards?

            A)  The complicated nature of particular standards

            B)   The tax-driven nature of the national accounting regime

            C)   An overload of guidance on the first-time application of IFRS

            D)  IFRS language translation difficulties

26 . What types of issues cause differences between International Financial Reporting Standards and U.S. GAAP?

            A)  measurement

            B)   alternatives available

            C)   disclosure

            D)  All of the above may be different between IFRS and U.S. GAAP.

27.Which of the following inventory valuation methods commonly used in the U.S. is NOT allowed under IAS 2 (Inventories)?

            A)  LIFO

            B)   FIFO

            C)   weighted average

            D)  retail inventory method

28. What is the basis for choosing depreciation methods for fixed assets under IAS 16 (Property, Plant, & Equipment)?

            A)  Tax minimization

            B)   Profit maximization

            C)   Useful life of the fixed asset

            D)  Pattern of economic benefits to be derived from the asset

29. If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:

            A)  annual revaluations must be performed on each class of assets.

            B)   it must update the valuation so that the balance sheet represents fair value on the balance sheet date.

            C)   appraisals must be performed by an official of the IASB.

            D)  the depreciated replacement cost must be used as the fair value of the fixed asset.


30. Through 50 years of high quality service, Domo Diagnostics Laboratory has created goodwill with its clients that management estimates is worth at least $20,000,000.  Under IAS 38, how should this be recognized?

            A)  An intangible asset “Goodwill” should be debited for $20,000,000.

            B)   The $20,000,000 should be expensed over a period of 20 years.

            C)   The $20,000,000 should be expensed over a period of 50 years.

            D)  It should not be recognized in Domo’s accounting records at all.

31. How does IAS 38 (Intangible Assets) differ from U.S. GAAP with respect to development costs?

            A)  U.S. GAAP does not allow capitalization of development costs, whereas IAS 38 allows capitalization of these costs.

            B)   U.S. GAAP requires capitalization of development costs, whereas IAS 38 makes capitalization of these costs optional.

            C)   U.S. GAAP treats development costs as part of “Goodwill” whereas IAS 38 treats these costs as an intangible asset.

            D)  U.S. GAAP requires expensing of all development costs and IAS 38 requires capitalizing all development costs.

32. How should the cost of borrowing funds to acquire or construct property, plant, and equipment be accounted for under IASB rules, as revised in 2007?

            A)  It should be expensed in the period incurred.

            B)   It should be added to the other costs of acquiring fixed assets to determine the amount for the balance sheet.

            C)   Both methods are acceptable.

            D)  Neither method is acceptable under IASB rules.

33.       The following inventory information above was taken from the records of GlobeKom Ltd.:

  Under IAS 2, what should the Balance Sheet report for Inventory?

            A)  $9,000

            B)   $8,500

            C)   $9,500

            D)  $10,000

    34.   According to IFRS 8 (Segment Reporting), which is not one of the three criteria for defining an operating segment?

            A)  An operating segment can’t merely be a lessor.

            B)   An operating segment is a component of a business that generates revenues.

            C)   An operating segment is a component of a business whose operating results are regularly reviewed by the chief operating officer.

            D)  An operating segment has separate financial information available.

35. Under IAS 16 (Property, Plant, and Equipment), subsequent revaluation decreases are:

            A)  never recognized.

            B)   credited to a revaluation surplus account.

            C)   recognized as an expense on the Income Statement.

            D)  first recognized as a reduction in any related revaluation surplus.

36. Under IAS 2, what adjustment needs to be made after an inventory write-down if the selling price subsequently increases?

     A)   No adjustment is necessary.  Once inventory is written down, it cannot be increased under IASB standards.

     B)   It should be sold at the replacement cost.

     C)   The inventory write-down should be reversed to bring it in line with the new net realizable value.

     D)   Recovery of inventory loss should be debited to reflect the increase in inventory value.

37. Why is it difficult to compare IAS 18, Revenue,to U.S. GAAP?

            A)  The IASB definition of revenue is very complicated, whereas the definition of revenue under U.S. GAAP is straightforward.

            B)   Revenue is not defined under U.S. GAAP.

            C)   There is no single standard in U.S. GAAP that deals solely with revenue.

            D)  Under U.S. GAAP, revenue is defined in terms of cash, whereas IAS 18 defines revenue in terms of a variety of resources.

38. Which of the following represents a difference in the classification of current liabilities between IFRS and U.S. GAAP?

            A)  refinanced short-term debt

            B)   amounts payable on demand due to violation of debt covenants

            C)   bank overdrafts

            D)  all of the above

39. Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

     A)   computer software costs

     B)   copyrights

     C)   customer lists

     D)   motion pictures

   40. Under IAS 36, Income Taxes, which of the following issues are covered?

            A)  temporary differences

            B)   operating loss carry-forwards

            C)   tax credit carry-forwards

            D)  all of the above

41. Which of the following is generally true about the differences between U.S. GAAP and IASB standards?

            A)  U.S. GAAP is generally more flexible than IASB standards.

            B)   U.S. GAAP tends to be more rule-based and the IASB standards tend to be principles-based.

            C)   More professional judgment is required to apply U.S. GAAP than is required for implementing IASB standards.

            D)  In all cases, U.S. GAAP is more detailed than the IASB standards.

Answer: B   Level: Medium   LO: 1  

42. In what way does the IASB standard on Leases (IAS 17) differ from U.S. GAAP?

            A)  It is less specific than U.S. GAAP in terms of defining what constitutes a finance lease.

            B)   U.S. GAAP requires more professional judgment in accounting for leases than does IAS 17.

            C)   IAS 17 is more specific than U.S. GAAP in defining an operating lease.

            D)  Operating leases are capitalized under IAS 17 but are not capitalized under U.S. GAAP

43. Under the current rate method of translating foreign currency financial statements, what exchange rate should be used for cost of goods sold?

            A)  spot rate at the end of the year

            B)   average rate during the year

            C)   spot rate mid-year

            D)  There is no single rate because beginning and ending inventory must be converted at different exchange rates than purchases.

  44. What exchange rate should be used to translate the common stock of Essco Ltd, a foreign subsidiary of Peako Corp., when consolidating the financial statements using the current rate method?

            A)  current rate

            B)   historical rate

            C)   average rate

            D)  cannot be determined with the information given

45. Under FASB ASC 830, Foreign Currency Matters, when the temporal method is used, how are translation adjustments treated in the consolidated financial statements?

            A)  as gains or losses on the current period consolidated income statement

            B)   as prior period adjustments to retained earnings of the parent

            C)   as part of other comprehensive income on the consolidated balance sheet

            D) None of the above because the temporal method is not allowed under FASB ASC 830

46. Which method of translating foreign currency financial statements must be used according to FASB ASC 830, Foreign Currency Matters?

            A)  Temporal method for all subsidiaries

            B)   Current rate method for all subsidiaries

            C)   U.S. parent companies may choose between the temporal method and the current rate method.

            D)  Temporal method for subsidiaries that are closely controlled by the parent and current rate method for subsidiaries which are not

47. Which of the following methods for translating foreign currency financial statements is no longer allowed under U.S. GAAP?

            A)  Temporal method

            B)   Current/Noncurrent method

            C)   Current rate method

            D)  None of these methods are allowed under GAAP.

48. Which of the following methods for translating foreign currency financial statements is required under IAS 21?

            A)  Current rate method

            B)   Temporal method

            C)   Current rate method or temporal method, depending on the functional currency of the subsidiary

            D)  Current rate method or temporal method may be chosen by management of the parent.

            D)  Monetary/Nonmonetary method

49. Under IAS 21, which of the following is not a factor in determining functional currency?

            A)  It is the currency that influences sales prices for goods and services.

            B)   It is the currency that mainly influences labor, material and other costs of providing goods and services.

            C)   It is the currency least likely to experience hyperinflation.

            D)  It is the currency in which funds from financing activities are generated.

50. Under both the temporal method and the current rate method, what exchange rate should be used to translate a foreign subsidiary’s dividends into parent company currency?

            A)  current rate

            B)   historical rate

            C)   average rate

            D)  Any of the above methods may be used under both the temporal and current method.

51. Essay Question:

Compare and contrast US GAAP and IFRS GAAP.  Support which GAAP you believe presents a stronger financial snapshot to the investors.  Support which GAAP you believe presents a stronger financial snapshot to the management team. 



Great Job

Great job! Those were you, guys, who made my coursework perfect in time according to all my requirements. I will...

No Complaints So far Guys

Yeah …I really like all the discounts that they offer, the prices are very flexible. Plus they have different promotions...


They look cool and trustworthy enough to me. I gather they made discounts as their prices are quite affordable if...

Comes through every time

I have used this website for many times, and each time they found perfect writers for me and they produce...

Best Service

The book review I asked for is so amazing! Endless thanks to your team for completing my review and for...

Mh! not bad…

The worst part ever was to find my deadline postponed for 1 hour ! They couldn`t finish the essay within...

CLICK HERE  To order your paper

About Scholarfront Essay writing service

We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.

How It Works

To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.

Are there Discounts?

All new clients are eligible for upto 20% off in their first Order. Our payment method is safe and secure.

 CLICK HERE to Order Your Assignment



Let your paper be done by an expert

Custom Essay Writing Service

Our custom essay writing service has already gained a positive reputation in this business field. Understandably so, all custom papers produced by our academic writers are individually crafted from scratch and written according to all your instructions and requirements. We offer Havard, APA, MLA, or Chicago style papers in more than 70 disciplines. With our writing service, you can get quality custom essays, as well as a dissertation, a research paper, or term papers for an affordable price. Any paper will be written on time for a cheap price.

Professional Essay writing service

When professional help in completing any kind of homework is all you need, is the right place to get it. We guarantee you help in all kinds of academia, including essay, coursework, research, or term paper help etc., it is no problem for us. With our cheap essay writing service, you can be sure to get credible academic aid for a reasonable price, as the name of our website suggests. For years, we have been providing online custom writing assistance to students from countries all over the world, including the United States, Canada, the United Kingdom, Australia, Italy, New Zealand, China, and Japan.