Accounting Quiz4

10 Questions | Total Attempts: 232

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Accounting Quizzes & Trivia

Questions and Answers
  • 1. 
    Dilty Corp. owned a subsidiary in France. Dilty concluded that the subsidiary's functional currency was the U.S. dollar. What must Dilty do to ready the subsidiary's financial statements for consolidation?
    • A. 

      Remeasure them.

    • B. 

      First remeasure them, then translate them.

    • C. 

      Translate them.

    • D. 

      First translate them, then remeasure them.

    • E. 

      State all of the subsidiary's accounts in U.S. dollars using the exchange rate in effect at the balance sheet date.

  • 2. 
    According to U.S. GAAP for a local currency perspective, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?
    • A. 

      The monetary/nonmonetary method.

    • B. 

      The current rate method.

    • C. 

      The remeasurement method.

    • D. 

      The current/noncurrent method.

    • E. 

      The noncurrent rate method.

  • 3. 
     The translation adjustment from translating (current method) a foreign subsidiary's financial statements should be shown as
    • A. 

      An asset or liability (depending on the balance) in the consolidated balance sheet.

    • B. 

      A component of stockholders' equity in the consolidated balance sheet.

    • C. 

      A component of cash flows from financing activities in the consolidated statement of cash flows.

    • D. 

      A revenue or expense (depending on the balance) in the consolidated income statement.

    • E. 

      An element of the notes which accompany the consolidated financial statements.

  • 4. 
    Which of the following could explain why accounting is more conservative in some countries than in others?
    • A. 

      Published Financial statements are the basis for taxation.

    • B. 

      Published Financial statements are the basis for taxation.

  • 5. 
    Which of the following is not a problem caused by differences in financial reporting practices across countries?
    • A. 

      Firms face double taxation on income earned by foreign operations.

    • B. 

      Firms face double taxation on income earned by foreign operations.

  • 6. 
    According to the IASB, IFRS are composed of:
    • A. 

      International financial reporting standards issued by the IASB and international accounting standards issued by the IASC.

    • B. 

      International financial reporting standards issued by the IASB and international accounting standards issued by the IASC.

  • 7. 
    What is the Norwalk Agreement?
    • A. 

      An agreement between the FASB and the IASB to make their existing standards compatible as soon as practicable and to work together to ensure compatibility in the future.

    • B. 

      An agreement between the FASB and the IASB to make their existing standards compatible as soon as practicable and to work together to ensure compatibility in the future.

  • 8. 
    Which of the following does not accurately describe a requirement that a company must fulfill when adopting IFRS for the first time?
    • A. 

      The company must prepare an opening IFRS balance sheet at the beginning of the year for which the company is preparing its first set of IFRS financial statements.

    • B. 

      The company must prepare an opening IFRS balance sheet at the beginning of the year for which the company is preparing its first set of IFRS financial statements.

  • 9. 
    In which of the following does the IASB allow firms to choose between two acceptable treatments?
    • A. 

      Measuring property, plant, and equipment subsequent to acquisition.

    • B. 

      Measuring property, plant, and equipment subsequent to acquisition.

  • 10. 
    In the United States, foreign companies filing annual reports with the SEC that are not prepared in accordance with U.S. GAAP Must: