Question 1
Which of the following statements is TRUE concerning the International Accounting Standards Board?
- It is an institution of the European Union designed to harmonize accounting in EU member countries.
- The EU has voted to not adopt IFRS issued by the IASB so that it will not hurt its own convergence efforts.
- The IASB and the FASB of the United States are working closely to harmonize accounting standards.
- FASB has been ordered by the SEC to not work with the IASB in setting accounting standards.
Question 2
The process of restating foreign currency financial statements into U.S. dollars is known as _________.
- conversion
- translation
- consolidation
- recognition
Question 3
Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership position and promised capital gains. This is an example of __________.
- equity securities
- debt financing
- playing the stock market
- investing in Euroequities
Question 4
Which accounting systems are shaped more by government influence?
- Macro-uniform accounting systems
- Micro-based systems
- Pragmatic business practice systems
- Business economic theory systems
Question 5
Coca-Cola has subsidiaries all over the world. The process of combining the results of its far-flung operations into one set of financial statements for investors is known as __________.
- combination
- evaluation
- consolidation
- unification of results
Question 6
Home-country nationals are:
- used a great deal abroad by polycentric companies.
- citizens of the countries in which they are working.
- citizens of the country where the company is headquartered.
- noncitizens of the countries in which they are working.
Question 7
The translation method used when the functional currency is the parent currency is the __________.
- current-rate method
- temporal method
- translate-restate method
- consolidation method
Question 8
The balanced scorecard is:
- when a company strikes a balance between high and low transfer prices.
- an approach to performance measurement.
- used widely by U.S. firms but not European firms.
- not very successful at linking financial and nonfinancial performance.
Question 9
The concept of leveraging in finance refers to:
- the degree to which companies rely on foreign exchange to fund operations.
- how a company hedges it foreign currency obligations.
- the degree to which a firm funds the growth of a business by debt.
- how much cash the CFO has in the bank.
Question 10
The price on the sale of goods from one member of a corporate family to another is known as a __________.
- transfer price
- sale/resale price
- global price
- multidomestic price