Test Bank for International Accounting, 6th Edition
by Timothy Doupnik
1
,Test rBank rfor rInternational rAccounting, r6th rEdition rby rTimothy rDoupnik
Chapter r01 r6e
1) Which rof rthe rfollowing rgroups ris ra rsupranational
r organization?
A) International rAccounting rStandards rBoard
B) Organization rfor rEconomic rCooperation rand rDevelopment
C) International rFederation rof rAccountants
D) All rof rthese ranswers rare rcorrect.
2) Determination rof rnet rpresent rvalue rinvolves:
A) forecasting rfuture rprofits rand rcash rflows.
B) discounting rfuture rcash rflows rback rto rtheir rpresent rvalue.
C) analysis ron ran rafter-tax rbasis.
D) All rof rthese ranswers rare rcorrect.
3) In rwhich rof rthe rfollowing rlevels rcan rinternational raccounting rbe rdefined?
A) Supranational rorganizations
B) Company
C) Country
D) All rof rthese ranswers rare rcorrect.
4) Which rof rthe rfollowing rfunctional rareas ris rincluded rin rthe rstudy rof rinternational raccounting?
A) Financial raccounting
B) Managerial
C) Taxation
D) All rof rthese ranswers rare rcorrect.
5) The rfactor rused rto rconvert rfrom rone rcountry's rcurrency rto ranother rcountry's rcurrency ris
r called rthe:
A) interest rrate.
B) cost rof rcapital.
C) exchange rrate.
D) strike rprice.
2
,6) What ris rthe rterm rused rto rdescribe rthe rpossibility rthat ra rforeign rcurrency rwill rdecrease rin
U.S. rdollar rvalue rover rthe rlife rof ran rasset rsuch ras rAccounts rReceivable?
r
A) Foreign rexchange rtranslation
B) Foreign rexchange rrisk
C) Hedging
D) Foreign rcurrency roptions
7) Foreign rexchange rrisk rarises rwhen:
A) business rtransactions rare rdenominated rin rforeign rcurrencies.
B) sales rare rmade rto rcustomers rin ra rdomestic rcountry.
C) goods ror rservices rpurchased rfrom rsuppliers rin ra rforeign rcountry rare rdenominated
in rdomestic rcurrency.
r
D) auditing rreports rare rprepared rin ra rforeign rcurrency.
8) In rinternational raccounting, ra r"hedge" ris:
A) a rbusiness rtransaction rmade rto rreduce rthe rexposure rof rforeign rexchange rrisk.
B) the rlegal rbarriers rin rvarious rdivisions rof ra rmultinational rcompany.
C) the rloss rin rUS rdollar rresulting rfrom ra rdecline rin rthe rvalue rof rthe rUS rdollar rrelative
to rforeign rcurrencies.
r
D) a rform rof rforeign rdirect rinvestment.
9) Purchasing ran roption rto rbuy rforeign rcurrency rat ra rpredetermined rexchange rrate rin rorder
to rreduce rexchange rrisk ris rcalled:
r
A) transfer rpricing.
B) hedging.
C) translating.
D) cross-listing.
10) What rterm ris rused rto rdescribe rthe rprocess rof rreducing rforeign rexchange rrisk?
A) International raccounting
B) Exposure
C) Hedging
D) Globalization
3
, 11) What ris rthe radvantage rof rforeign rdirect rinvestment?
A) Helps rin rretaining radvantage rover rcompetition
B) Reduces rtransportation rcosts
C) Creates ra rcompany rtailored rto ra rforeign rmarket's runique rcharacteristics
D) All rof rthese ranswers rare rcorrect.
12) How rshould rwe rrecognize rthe rdifference rin rthe rvalue rof ra rreceivable rin ra rforeign rcurrency
at rthe rtime rit rwas rrecorded rand rthe rtime rthe rcash rwas rreceived?
r
A) As ran radjustment rto rstockholders' requity
B) As ran radjustment rto rpurchases
C) As ran rextraordinary rcapital rexpenditure
D) As ra rprior rperiod radjustment
13) What rcurrency ris rused rin rthe rUnited rKingdom?
A) Crown
B) Euro
C) British rpound
D) UK rdollar
14) Which rof rthese rEuropean rcountries rdoes rNOT ruse rthe rEuro ras rits rdomestic rcurrency?
A) France
B) United rKingdom
C) Ireland
D) The rNetherlands
15) Which rof rthe rfollowing rterms ris rused rto rdescribe rthe rcombining rof rthe rfinancial rstatements
of rall rsubsidiaries, rboth rforeign rand rdomestic, rinto rthe rfinancial rstatements rof rthe rparent?
r
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
4
by Timothy Doupnik
1
,Test rBank rfor rInternational rAccounting, r6th rEdition rby rTimothy rDoupnik
Chapter r01 r6e
1) Which rof rthe rfollowing rgroups ris ra rsupranational
r organization?
A) International rAccounting rStandards rBoard
B) Organization rfor rEconomic rCooperation rand rDevelopment
C) International rFederation rof rAccountants
D) All rof rthese ranswers rare rcorrect.
2) Determination rof rnet rpresent rvalue rinvolves:
A) forecasting rfuture rprofits rand rcash rflows.
B) discounting rfuture rcash rflows rback rto rtheir rpresent rvalue.
C) analysis ron ran rafter-tax rbasis.
D) All rof rthese ranswers rare rcorrect.
3) In rwhich rof rthe rfollowing rlevels rcan rinternational raccounting rbe rdefined?
A) Supranational rorganizations
B) Company
C) Country
D) All rof rthese ranswers rare rcorrect.
4) Which rof rthe rfollowing rfunctional rareas ris rincluded rin rthe rstudy rof rinternational raccounting?
A) Financial raccounting
B) Managerial
C) Taxation
D) All rof rthese ranswers rare rcorrect.
5) The rfactor rused rto rconvert rfrom rone rcountry's rcurrency rto ranother rcountry's rcurrency ris
r called rthe:
A) interest rrate.
B) cost rof rcapital.
C) exchange rrate.
D) strike rprice.
2
,6) What ris rthe rterm rused rto rdescribe rthe rpossibility rthat ra rforeign rcurrency rwill rdecrease rin
U.S. rdollar rvalue rover rthe rlife rof ran rasset rsuch ras rAccounts rReceivable?
r
A) Foreign rexchange rtranslation
B) Foreign rexchange rrisk
C) Hedging
D) Foreign rcurrency roptions
7) Foreign rexchange rrisk rarises rwhen:
A) business rtransactions rare rdenominated rin rforeign rcurrencies.
B) sales rare rmade rto rcustomers rin ra rdomestic rcountry.
C) goods ror rservices rpurchased rfrom rsuppliers rin ra rforeign rcountry rare rdenominated
in rdomestic rcurrency.
r
D) auditing rreports rare rprepared rin ra rforeign rcurrency.
8) In rinternational raccounting, ra r"hedge" ris:
A) a rbusiness rtransaction rmade rto rreduce rthe rexposure rof rforeign rexchange rrisk.
B) the rlegal rbarriers rin rvarious rdivisions rof ra rmultinational rcompany.
C) the rloss rin rUS rdollar rresulting rfrom ra rdecline rin rthe rvalue rof rthe rUS rdollar rrelative
to rforeign rcurrencies.
r
D) a rform rof rforeign rdirect rinvestment.
9) Purchasing ran roption rto rbuy rforeign rcurrency rat ra rpredetermined rexchange rrate rin rorder
to rreduce rexchange rrisk ris rcalled:
r
A) transfer rpricing.
B) hedging.
C) translating.
D) cross-listing.
10) What rterm ris rused rto rdescribe rthe rprocess rof rreducing rforeign rexchange rrisk?
A) International raccounting
B) Exposure
C) Hedging
D) Globalization
3
, 11) What ris rthe radvantage rof rforeign rdirect rinvestment?
A) Helps rin rretaining radvantage rover rcompetition
B) Reduces rtransportation rcosts
C) Creates ra rcompany rtailored rto ra rforeign rmarket's runique rcharacteristics
D) All rof rthese ranswers rare rcorrect.
12) How rshould rwe rrecognize rthe rdifference rin rthe rvalue rof ra rreceivable rin ra rforeign rcurrency
at rthe rtime rit rwas rrecorded rand rthe rtime rthe rcash rwas rreceived?
r
A) As ran radjustment rto rstockholders' requity
B) As ran radjustment rto rpurchases
C) As ran rextraordinary rcapital rexpenditure
D) As ra rprior rperiod radjustment
13) What rcurrency ris rused rin rthe rUnited rKingdom?
A) Crown
B) Euro
C) British rpound
D) UK rdollar
14) Which rof rthese rEuropean rcountries rdoes rNOT ruse rthe rEuro ras rits rdomestic rcurrency?
A) France
B) United rKingdom
C) Ireland
D) The rNetherlands
15) Which rof rthe rfollowing rterms ris rused rto rdescribe rthe rcombining rof rthe rfinancial rstatements
of rall rsubsidiaries, rboth rforeign rand rdomestic, rinto rthe rfinancial rstatements rof rthe rparent?
r
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
4
