TEST BANK
International Accounting
Timothy Doupnik
6th Edition
Chapters 1-12 (Questions with Verified Answers)
1
,TABLE OF CONTENT
1. Introduction to International Accounting
2. Worldwide Accounting Diversity
3. International Convergence of Financial Reporting
4. International Financial Reporting Standards: Part I
5. International Financial Reporting Standards: Part II
6. Foreign Currency Transactions and Hedging Foreign Exchange Risk
7. Translation of Foreign Currency Financial Statements
8. International Taxation
9. International Transfer Pricing
10. Management Accounting Issues in Multinational Corporations
11. Auditing and Corporate Governance: An International Perspective
12. International Sustainability Reporting
2
,Chapter 01
(ANSWERS AT THE END OF EVERY CHAPTER)
1) Which of the following groups is a supranational organization?
A) International Accounting Standards Board
B) Organization for Economic Cooperation and Development
C) International Federation of Accountants
D) All of these answers are correct.
2) Determination of net present value involves:
A) forecasting future profits and cash flows.
B) discounting future cash flows back to their present value.
C) analysis on an after-tax basis.
D) All of these answers are correct.
3) In which of the following levels can international accounting be defined?
A) Supranational organizations
B) Company
C) Country
D) All of these answers are correct.
4) Which of the following functional areas is included in the study of international accounting?
A) Financial accounting
B) Managerial
C) Taxation
D) All of these answers are correct.
5) 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.
3
, 6) 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?
A) Foreign exchange translation
B) Foreign exchange risk
C) Hedging
D) Foreign currency options
7) Foreign exchange risk arises when:
A) business transactions are denominated in foreign currencies.
B) sales are made to customers in a domestic country.
C) goods or services purchased from suppliers in a foreign country are denominated in
domestic currency.
D) auditing reports are prepared in a foreign currency.
8) In international accounting, a "hedge" is:
A) a business transaction made to reduce the exposure of foreign exchange risk.
B) the legal barriers in various divisions of a multinational company.
C) the loss in US dollar resulting from a decline in the value of the US dollar relative to
foreign currencies.
D) a form of foreign direct investment.
9) Purchasing an option to buy foreign currency at a predetermined exchange rate in order to
reduce exchange risk is called:
A) transfer pricing.
B) hedging.
C) translating.
D) cross-listing.
10) What term is used to describe the process of reducing foreign exchange risk?
A) International accounting
B) Exposure
C) Hedging
D) Globalization
4
International Accounting
Timothy Doupnik
6th Edition
Chapters 1-12 (Questions with Verified Answers)
1
,TABLE OF CONTENT
1. Introduction to International Accounting
2. Worldwide Accounting Diversity
3. International Convergence of Financial Reporting
4. International Financial Reporting Standards: Part I
5. International Financial Reporting Standards: Part II
6. Foreign Currency Transactions and Hedging Foreign Exchange Risk
7. Translation of Foreign Currency Financial Statements
8. International Taxation
9. International Transfer Pricing
10. Management Accounting Issues in Multinational Corporations
11. Auditing and Corporate Governance: An International Perspective
12. International Sustainability Reporting
2
,Chapter 01
(ANSWERS AT THE END OF EVERY CHAPTER)
1) Which of the following groups is a supranational organization?
A) International Accounting Standards Board
B) Organization for Economic Cooperation and Development
C) International Federation of Accountants
D) All of these answers are correct.
2) Determination of net present value involves:
A) forecasting future profits and cash flows.
B) discounting future cash flows back to their present value.
C) analysis on an after-tax basis.
D) All of these answers are correct.
3) In which of the following levels can international accounting be defined?
A) Supranational organizations
B) Company
C) Country
D) All of these answers are correct.
4) Which of the following functional areas is included in the study of international accounting?
A) Financial accounting
B) Managerial
C) Taxation
D) All of these answers are correct.
5) 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.
3
, 6) 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?
A) Foreign exchange translation
B) Foreign exchange risk
C) Hedging
D) Foreign currency options
7) Foreign exchange risk arises when:
A) business transactions are denominated in foreign currencies.
B) sales are made to customers in a domestic country.
C) goods or services purchased from suppliers in a foreign country are denominated in
domestic currency.
D) auditing reports are prepared in a foreign currency.
8) In international accounting, a "hedge" is:
A) a business transaction made to reduce the exposure of foreign exchange risk.
B) the legal barriers in various divisions of a multinational company.
C) the loss in US dollar resulting from a decline in the value of the US dollar relative to
foreign currencies.
D) a form of foreign direct investment.
9) Purchasing an option to buy foreign currency at a predetermined exchange rate in order to
reduce exchange risk is called:
A) transfer pricing.
B) hedging.
C) translating.
D) cross-listing.
10) What term is used to describe the process of reducing foreign exchange risk?
A) International accounting
B) Exposure
C) Hedging
D) Globalization
4
