Test Bank for International Accounting, 6th Edition
j j j j j j j
j by Timothy Doupnik
j j
1
,Test Bank for International Accounting, 6th Edition by Timothy Doupnik
j j j j j j j j j
Chapter 01 6e j j
1) Which jof jthe jfollowing jgroups jis ja jsupranational
j organization?
A) International jAccounting jStandards jBoard
B) Organization jfor j Economic jCooperation j and j Development
C) International jFederation jof jAccountants
D) All j of j these janswers j are jcorrect.
2) Determination jof j net jpresent j value jinvolves:
A) forecasting jfuture jprofits j and j cash j flows.
B) discounting jfuture jcash j flows j back j to j their j present j value.
C) analysis jon jan jafter-tax j basis.
D) All j of j these janswers j are jcorrect.
3) In jwhich j of jthe jfollowing j levels j can j international j accounting j be jdefined?
A) Supranational jorganizations
B) Company
C) Country
D) All j of j these janswers j are jcorrect.
4) Which j of jthe jfollowing j functional j areas j is j included j in jthe jstudy j of jinternational j accounting?
A) Financial jaccounting
B) Managerial
C) Taxation
D) All j of j these janswers j are jcorrect.
5) The jfactor jused jto jconvert jfrom jone jcountry's jcurrency jto janother jcountry's jcurrency jis
j called jthe:
A) interest jrate.
B) cost j of j capital.
C) exchange jrate.
D) strike j price.
2
,6) What jis jthe jterm jused jto jdescribe jthe jpossibility j that j a jforeign jcurrency jwill j decrease jin
U.S. j dollar j value j over j the j life j of j an j asset j such j as jAccounts j Receivable?
A) Foreign jexchange jtranslation
B) Foreign jexchange jrisk
C) Hedging
D) Foreign jcurrency j options
7) Foreign jexchange jrisk j arises j when:
A) business jtransactions j are jdenominated jin jforeign j currencies.
B) sales jare jmade jto j customers j in j a jdomestic jcountry.
C) goods jor jservices jpurchased jfrom jsuppliers jin ja jforeign jcountry jare jdenominated
in jdomestic jcurrency.
j
D) auditing j reports j are jprepared j in j a jforeign j currency.
8) In jinternational j accounting, j a j"hedge" j is:
A) a jbusiness jtransaction j made jto jreduce jthe jexposure jof j foreign jexchange jrisk.
B) the jlegal j barriers j in jvarious j divisions j of ja jmultinational j company.
C) the jloss jin jUS jdollar jresulting jfrom ja jdecline jin jthe jvalue jof jthe jUS jdollar jrelative
to jforeign jcurrencies.
j
D) a jform j of j foreign j direct j investment.
9) Purchasing jan joption jto jbuy jforeign jcurrency jat ja jpredetermined jexchange jrate jin jorder
j to jreduce jexchange jrisk jis jcalled:
A) transfer jpricing.
B) hedging.
C) translating.
D) cross-listing.
10) What jterm j is jused jto jdescribe jthe jprocess j of jreducing j foreign j exchange jrisk?
A) International jaccounting
B) Exposure
C) Hedging
D) Globalization
3
, 11) What jis j the jadvantage jof j foreign j direct j investment?
A) Helps jin jretaining j advantage jover j competition
B) Reduces jtransportation j costs
C) Creates ja jcompany j tailored j to j a jforeign j market's junique jcharacteristics
D) All j of j these janswers j are jcorrect.
12) How jshould jwe jrecognize jthe jdifference jin jthe jvalue jof ja jreceivable jin ja jforeign jcurrency
j at jthe jtime jit jwas jrecorded jand jthe jtime jthe jcash jwas jreceived?
A) As jan j adjustment jto j stockholders' j equity
B) As j an j adjustment jto j purchases
C) As jan jextraordinary jcapital j expenditure
D) As j a j prior j period j adjustment
13) What jcurrency j is j used j in j the jUnited jKingdom?
A) Crown
B) Euro
C) British j pound
D) UK j dollar
14) Which jof j these jEuropean j countries j does j NOT j use jthe jEuro j as j its j domestic jcurrency?
A) France
B) United j Kingdom
C) Ireland
D) The j Netherlands
15) Which jof jthe jfollowing jterms jis jused jto jdescribe jthe jcombining jof jthe jfinancial jstatements
j of jall jsubsidiaries, jboth jforeign jand jdomestic, jinto jthe jfinancial jstatements jof jthe jparent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
4
j j j j j j j
j by Timothy Doupnik
j j
1
,Test Bank for International Accounting, 6th Edition by Timothy Doupnik
j j j j j j j j j
Chapter 01 6e j j
1) Which jof jthe jfollowing jgroups jis ja jsupranational
j organization?
A) International jAccounting jStandards jBoard
B) Organization jfor j Economic jCooperation j and j Development
C) International jFederation jof jAccountants
D) All j of j these janswers j are jcorrect.
2) Determination jof j net jpresent j value jinvolves:
A) forecasting jfuture jprofits j and j cash j flows.
B) discounting jfuture jcash j flows j back j to j their j present j value.
C) analysis jon jan jafter-tax j basis.
D) All j of j these janswers j are jcorrect.
3) In jwhich j of jthe jfollowing j levels j can j international j accounting j be jdefined?
A) Supranational jorganizations
B) Company
C) Country
D) All j of j these janswers j are jcorrect.
4) Which j of jthe jfollowing j functional j areas j is j included j in jthe jstudy j of jinternational j accounting?
A) Financial jaccounting
B) Managerial
C) Taxation
D) All j of j these janswers j are jcorrect.
5) The jfactor jused jto jconvert jfrom jone jcountry's jcurrency jto janother jcountry's jcurrency jis
j called jthe:
A) interest jrate.
B) cost j of j capital.
C) exchange jrate.
D) strike j price.
2
,6) What jis jthe jterm jused jto jdescribe jthe jpossibility j that j a jforeign jcurrency jwill j decrease jin
U.S. j dollar j value j over j the j life j of j an j asset j such j as jAccounts j Receivable?
A) Foreign jexchange jtranslation
B) Foreign jexchange jrisk
C) Hedging
D) Foreign jcurrency j options
7) Foreign jexchange jrisk j arises j when:
A) business jtransactions j are jdenominated jin jforeign j currencies.
B) sales jare jmade jto j customers j in j a jdomestic jcountry.
C) goods jor jservices jpurchased jfrom jsuppliers jin ja jforeign jcountry jare jdenominated
in jdomestic jcurrency.
j
D) auditing j reports j are jprepared j in j a jforeign j currency.
8) In jinternational j accounting, j a j"hedge" j is:
A) a jbusiness jtransaction j made jto jreduce jthe jexposure jof j foreign jexchange jrisk.
B) the jlegal j barriers j in jvarious j divisions j of ja jmultinational j company.
C) the jloss jin jUS jdollar jresulting jfrom ja jdecline jin jthe jvalue jof jthe jUS jdollar jrelative
to jforeign jcurrencies.
j
D) a jform j of j foreign j direct j investment.
9) Purchasing jan joption jto jbuy jforeign jcurrency jat ja jpredetermined jexchange jrate jin jorder
j to jreduce jexchange jrisk jis jcalled:
A) transfer jpricing.
B) hedging.
C) translating.
D) cross-listing.
10) What jterm j is jused jto jdescribe jthe jprocess j of jreducing j foreign j exchange jrisk?
A) International jaccounting
B) Exposure
C) Hedging
D) Globalization
3
, 11) What jis j the jadvantage jof j foreign j direct j investment?
A) Helps jin jretaining j advantage jover j competition
B) Reduces jtransportation j costs
C) Creates ja jcompany j tailored j to j a jforeign j market's junique jcharacteristics
D) All j of j these janswers j are jcorrect.
12) How jshould jwe jrecognize jthe jdifference jin jthe jvalue jof ja jreceivable jin ja jforeign jcurrency
j at jthe jtime jit jwas jrecorded jand jthe jtime jthe jcash jwas jreceived?
A) As jan j adjustment jto j stockholders' j equity
B) As j an j adjustment jto j purchases
C) As jan jextraordinary jcapital j expenditure
D) As j a j prior j period j adjustment
13) What jcurrency j is j used j in j the jUnited jKingdom?
A) Crown
B) Euro
C) British j pound
D) UK j dollar
14) Which jof j these jEuropean j countries j does j NOT j use jthe jEuro j as j its j domestic jcurrency?
A) France
B) United j Kingdom
C) Ireland
D) The j Netherlands
15) Which jof jthe jfollowing jterms jis jused jto jdescribe jthe jcombining jof jthe jfinancial jstatements
j of jall jsubsidiaries, jboth jforeign jand jdomestic, jinto jthe jfinancial jstatements jof jthe jparent?
A) Convergence
B) Hedging
C) Consolidation
D) Incorporation
4
