Advance Final

61 cards

Have to pass this final


 
  
Created Dec 15, 2011
by
kicklighter43

 

 
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  Side A   Side B
1
A spot rate may be defined as
 
The price a foreign currency can be purchased or sold today
2
the forward rate may be defined as
 
The price today at which a foreign currency can be purchased or sold in the future
3
Which statement is true regarding a foreign currency option
 
A foreign currency option gives the holder the right but not the obligation to buy or sell...
4
A U.S company sells merchandise to a foreign company denominated in U.S. DOLLARS. Which of...
 
No foreign exchange gain or loss will result
5
A U.S company sells merchandise to a foreign company denominated in the foreign currency. Which...
 
If the foreign currency appreciates, a foreign exchange gain will result
6
A U.S company buys merchandise from a foreign company denominated in U.S dollars. Which of...
 
No foreign exchange gain or loss will result
7
A U.S. company buys merchandise from a foreign company denominated in the foreign currency....
 
If the foreign currency appreciates, a foreign exchange loss will result
8
SFAS 133 provides guidance for hedges of all the following sources of foreign exchange risk...
 
Deferred foreign currency gains and losses
9
All of the following data may be needed to determine the fair value of a forward contract at...
 
The future spot rate
10
A forward contract may be used for which of the following
 
1,2,3,4
11
A company has a discount on a forward contract for an asset. How is the discount recognized...
 
It is charged to accumulated other comprehensive income
12
A speculative derivative would be similar to which type of hedge?
 
An option designated as a fair value hedge
13
Which of the following statements is true concerning hedge accounting?
 
Hedges of foreign currency firm commitments are used for future sales or purchases
14
All of the following hedges are used for future purchase/sale transactions except?
 
Forward contracts used to hedge a foreign currency denominated liability
15
Which of the following approaches is used in the United States in accounting for foreign currency...
 
Two-transaction perspective;accrue foreign exchange gains and losses
16
When a U.S company purchases parts from a foreign company, which of the following will result...
 
The transaction is denominated in U.S dollars
17
Angela Inc. a U.S company, had a euro receivable from exports to Spain and a British pound...
 
Euro:Increase
pound:Decrease
18
Frankfurter Company, A U.S. company had a ruble receivable from exports to Russia and a euro...
 
Ruble:Decrease
Euro: Increase
19
Larson Company, A U.S. company has an India rupee account receivable resulting from an export...
 
Premium revenue
20
Williams Inc. A U.S. company has a Japanese yen account receivable resulting from an export...
 
Premium Revenue
21
What journal entry should Eagle prepare on October 1
 
Debit: Foreign Currency Option
Credit:Cash

22
What Journal entry should Eagle prepare on December 31
 
Debit:Option Expense
Credit:Foreign Currency option
23
In accounting, the term translation refers to
 
A procedure to prepare a foreign subsidiary financial statements for consolidation
24
What is a company's functional currency?
 
The currency of the primary economic environment in which it operates
25
According to SFAS 52 which method is usually required for translating a foreign subsidiary's...
 
The current rate method
26
In translating a foreign subsidiary financial statements which exchange rate does the current...
 
the exchange rate in effect as of the balance sheet date
27
The translation adjustment from translating a foreign subsidiary's financial statements should
 
A component of stockholders equity on the balance sheet
28
Which of the following translation methods was originally mandated by SFAS NO. 8?
 
Temporal Method
29
Which accounts are re-measured using current exchange rates?
 
All current assets and liabilities
30
For a foreign subsidiary that uses the US dollar as its functional currency, what translation...
 
temporal method
31
Which of the following statements would justify this conclusion?
 
Most of the subsidiary's sales and purchases were with companies in the U.S
32
What must Dilty do to ready the subsidiary financial statements for consolidation?
 
Re-measure them
33
A historical exchange rate for a foreign subsidiary is best described as
 
The rate at date of acquisition for a purchase transaction
34
A net asset balance sheet exposure exists and the foreign currency appreciates. Which of the...
 
There is a positive translation adjustment
35
A net asset balance sheet exposure exist and the foreign currency depreciates. Which of the...
 
there is a negative translation adjustment
36
A net liability balance sheet exposure exists and the foreign currency appreciates. Which of...
 
there is a negative translation adjustment
37
A net liability balance sheet exposure exists and the foreign currency depreciates. Which of...
 
There is a positive translation adjustment
38
Which method of translating a foreign subsidiary's financial statements is correct?
 
Current rate method
39
Which method of re-measuring a foreign subsidiary's financial statements is correct?
 
Temporal method
40
Under the temporal method inventory at market would be restated at what rate?
 
Current Rate
41
Under the current rate method inventory at market would be restated at what rate?
 
Current Rate
42
Under the temporal method common stock would be restated at what rate?
 
historical rate
43
Under The current rate method property,plant and equipment would be restated at what rate?
 
Current Rate
44
Under the temporal method, property, plant and equipment would be restated at what rate?
 
Historic Rate
45
Under the current rate method retained earnings would be restated at what rate?
 
Composite amount
46
Under the temporal method, retained earnings would be restated at what rate?
 
Composite amount
47
Under the current rate method, depreciation expense would be restated at what rate?
 
Average Rate
48
Under the temporal method, depreciation expense would be restated at what rate?
 
Historical Rate
49
Under the temporal method how would cost of goods sold be restated?
 
Composite amount
50
Under the current rate method, how would cost goods sold be restated?
 
Average Rate
51
How is the disposition of the translated gain or loss reported on the parent company financial...
 
other comprehensive income
52
How is the disposition of the re-measurement gain or loss reported on the parent company's...
 
net income/loss on the income statement
53
A highly inflationary economy is defined as
 
cumulative 3 year inflation in excess of 100%
54
If a subsidiary is operating in a highly inflationary economy, how are the financial statements...
 
Re-measurement
55
When consolidating a foreign subsidiary, which of the following statements is true?
 
Parent reports a cumulative translation adjustment using the equity method
56
When preparing a consolidating statement of cash flows, which of the following statements is...
 
Subsidiary dividends are deducted as a financing activity
57
When translating Quadro's financial statement which of the following statements is true?
 
there will be a positive cumulative translation adjustment reported on the consolidated balance...
58
For what amount should sales be credited on December 1?
 
17,241
59
What amount of foreign exchange gain or loss should be recorded on December 31?
 
941 gain
60
What amount of foreign exchange gain or loss should be recorded on January 30?
 
1516 Loss
61
Meisner Co ordered parts costing 100,000 for a foreign supplier on May 12 when the spot rate...
 
$28,000

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