Accounting Quiz

What is the intent of IFRS 1?

• To provide the framework for setting international accounting standards

• To establish the guidelines for financial statement presentation

• To provide the working definitions of accounting elements

• To provide guidance on first-time application of IFRS

What term is used to describe the process of reducing foreign exchange risk?

• International accounting

• Exposure

• Hedging

• Globalization

As per U.S. corporate tax laws, which of the following statements is true of a company that is incorporated in the U.S. and has a branch in a foreign country?

• The credit for the amount of taxes already paid is given to arrange for double taxation.

• The credit for the amount of taxes already paid is given to charge for the taxes not paid in the home country.

• The credit for the amount of taxes already paid is given to give relief for the taxes paid in the foreign country.

• The credit for the amount of taxes already paid is given to refund the taxes already paid in the home country

Which of the following is an advantage of having a single set of accounting standards used worldwide?

• Reduced number of multinational corporations on the NYSE

• Reduced accounting costs for multinational corporations

• Increased power of the FASB

• Increased diversity of accounting methods used by multinational corporations

Which of the following qualitative characteristics make financial statement information useful?

• Relevance

• Understandability

• Reliability

• All of the above

Which of the following is not one of the three forms of business organization?

• Proprietorships.

• Partnerships.

• Corporations.

• Investors

What is the advantage of foreign direct investment?

• Helps in retaining advantage over competition.

• Reduces transportation costs.

• Creates a company tailored to a foreign market's unique characteristics.

• All of the above

Why does the IASB believe that a principles-based approach to standard setting is superior to a rules-based approach?

• Principles-based standard setting is less costly to undertake than rules-based standard formulation.

• A conceptual framework for standard setting has demonstrated to encourage the greatest economic development.

• It is desirable to have all corporations in all countries using the same accounting practice.

• Detailed guidance or rules encourage accountants to look for ways around the rules rather than trying to provide useful information

It is generally believed that the 1997 financial crisis in East Asia was partly due to accounting factors in that part of the world. Which of the following accounting values was lacking in that part of the world and thereby contributed to the crisis?

• Professionalism

• Statutory control

• Uniformity

• Transparency

How are International Financial Reporting Standards enforced?

• Regulatory bodies of individual countries

• All of the above

• Enforcement Committee of the International Accounting Standards Board

• International Securities and Exchange Commission

• A and B