International Accounting - Ch 9
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IFRS focus on accounting for inflation, consolidations, and segment reporting contrasted with U. S. GAAP Basef on chapter 9 of the textbook International Accounting 3rd edtion by Doupnik and Perera
- 1.____________ accounting was created to account for changes in the general price level and makes adjustments to the historical costs of non-monetary assets to update for changes in the purchasing power of the currency.
- A.
General purchasing power
- B.
Current replacement cost
- C.
Price level
- D.
Current cost
- 2._________________ accounting was created to account for specific price changes by updating the values of non-monetary assets from historical cost to the current cost to replace those assets.
- A.
General purchasing power
- B.
Price level
- C.
Current replacement cost
- D.
Specific price
- 3.General purchasing power accounting includes purchasing power gains and losses in net income.
- A.
True
- B.
False
- 4.General purchasing power accounting requires all assets to be restated based on the general price index (GPI).
- A.
True
- B.
False
- 5.IFRS requires companies operating in hyperinflationary economies to use ______________ accounting.
- A.
Current replacement cost
- B.
General purchasing power
- 6.IAS 27 requires a parent to consolidate all subsidiaries unless,
- A.
The subsidiary was acquired with the intention to be disposed of within 12 months and management is actively seeking a buyer
- B.
The subsidiary is dormant and its operations are insignificant to the company as a whole
- C.
Management is actively seeking a buyer
- D.
A or b
- 7.US GAAP allows a subsidiary to be exluded from consolidation if it is being held for sale
- A.
True
- B.
False
- 8.IFRS uses the ___________ method to account for business compbinations that are fully consolidated.
- A.
Pooling
- B.
Historical cost
- C.
Purchase
- D.
Fair value
- 9.The purchase methods requires assets and liabilities of the subsidiary to be restated at their __________ as of the date of acquisition.
- A.
Historical costs
- B.
Fair value
- C.
Replacement value
- 10.IFRS allows the determination of the initial amount to measure subsidiaries assets and liabilities that are acquired at under 100 percent through either the parent company concept or the economic unit aka the entity concept.
- A.
True
- B.
False
- 11.The parent company concepts values subsidiary's assets and liabilities at book value plus the parent's ownsership percentage of the difference between fair value and book value at the date of acquisition.
- A.
True
- B.
False
- 12.The economic unit or entity concept values subsidiary's assets and liabilites at 100 percent of their fair value at the date of acquisition.
- A.
True
- B.
False
- 13.IFRS and US GAAP require goodwill to be tested for impairment annually.
- A.
True
- B.
False
- 14.The pooling of interest method is permitted in US GAAP
- A.
True
- B.
False
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