Acct 883/483 International Accounting

Sample Exam

Multiple Choice 1. How is the term stocks used on the balance sheet of a British company? A B C Capital stock in the !wners" #$uity section %hares of another company owned as marketable securities. &i'ed assets

( )n*entory

Answer+ ( ,e*el+ Medium ,!+ 1

-. A study conducted by the %#C in 1../ illustrated that 0.%. 1AA2 was more conser*ati*e for most of the forei3n entities listed on 0.%. e'chan3es. 4hat does this mean? A B C )ncome restated under 0.%. 1AA2 was hi3her than income under 1AA2 of the companies" home countries. )ncome restated under 0.%. 1AA2 was lower than income under 1AA2 of the companies" home countries. )ncome reported under 0.%. 1AA2 is more accurate than income reported under 1AA2 of other countries.

( Assets were understated when restated usin3 0.%. 1AA2.

Answer+ B ,e*el+ Medium ,!+ -

/. (ifferences in le3al systems used in *arious countries ha*e been cited as one reason for di*ersity in accountin3 practice. 4hat are the ma5or types of le3al systems? A commercial law and accountin3 law

B C

rules and re3ulations written law and unwritten law

( common law and code law

Answer+ ( ,e*el+ #asy ,!+ /

6. 7he accountin3 standards in code law countries tend to be . . . A B C *ery detailed. formulated by or3ani8ations such as the &A%B. stated broadly without much 3uidance on accountin3 procedures.

( *ery conser*ati*e.

Answer+ C ,e*el+ Medium ,!+ / 9. Accordin3 to %ir Bryan Carsber3: former )A%C %ecretary;1eneral: what is the most si3nificant cost of accountin3 di*ersity? A B C 7he time e'pended by accountants to create multiple sets of financial statements conformin3 to different national standards. 7he cost of the )A%B to re3ulate compliance with many national accountin3 standards. 7he reduction in effecti*eness of the international markets for capital.

( 7he resources used by countries in le3islatin3 different sets of accountin3 standards.

Answer+ C ,e*el+ Medium ,!+ 1: -

<. &rom a practical standpoint: what is the 3oal of accountin3 standards harmoni8ation? A B C Creatin3 one set of standards used throu3hout the world. =educin3 the conflict amon3 national accountin3 standards. 2roducin3 accountin3 standards that are uni$ue for each country.

( &orcin3 compliance with )A%B re3ulations.

Answer+ B ,e*el+ Medium ,!+ 1

>.

4hat is the focus of the ?orwalk A3reement between the )A%B and the &A%B? A B C 7o make 0.%. 1AA2 conform with e'istin3 )A%B standards 7o ensure that )A%B standards reflect e'istin3 0.%. 1AA2 7o make 0.%. 1AA2 and )A%B standards compatible

( 7o hi3hli3ht the differences between 0.%. 1AA2 and the )A%B standards

Answer+ C ,e*el+ Medium ,!+ -: 6

@. 4hat types of issues cause differences between )nternational &inancial =eportin3 %tandards and 0.%. 1AA2? A B C Measurement Alternati*es a*ailable (isclosure

( All of the abo*e may be different between )&=% and 0.%. 1AA2

Answer+ ( ,e*el+ Medium ,!+ -: 6

.. 4hich of the followin3 is 3enerally true about the differences between 0.%. 1AA2 and )A%B standards? A B C 0.%. 1AA2 is 3enerally more fle'ible than )A%B standards. 0.%. 1AA2 tends to be more rule;based and the )A%B standards tend to be principles;based. More professional 5ud3ment is re$uired to apply 0.%. 1AA2 than is re$uired for implementin3 )A%B standards.

( )n all cases: 0.%. 1AA2 is more detailed than the )A%B standards.

Answer+ B ,e*el+ Medium ,!+ -: 6

1A. 4hy do 1erman companies willin3ly take a conser*ati*e position in calculatin3 income? A B C 7o minimi8e ta' 7o keep employees from askin3 for hi3her wa3es. 7o stabili8e income from year to year for di*idend purposes.

( All of the abo*e

Answer+ ( ,e*el+ Medium ,!+ 1

0se the followin3 to answer $uestions 11;1-+

7he followin3 in*entory information abo*e was taken from the records of 1lobeBom ,td.+

11. 0nder )A% -: what should the Balance %heet report for )n*entory? A B C C.:AAA C@:9AA C.:9AA

( C1A:AAA

Answer+ C ,e*el+ Medium ,!+ 1: 9

1-. 0nder 0.%. 1AA2: what should the Balance %heet report for )n*entory?

A B C

C.:AAA C@:9AA C.:9AA

( C1A:AAA

Answer+ A ,e*el+ Medium ,!+ 1: 9

%hort Answer

1. 4hat are the impediments to harmoni8ation? 4hich of these is most important: in your *iew: and why?

-. (escribe ?obeDs 1..@ model of accountin3 di*ersity. 4hat are its primary features? How does it differ from other models de*eloped earlier?

/. How does financial reportin3: and the accountin3 and reportin3 en*ironment: compare across the nations of 1ermany and 0B? 4hat differences are there and how do these impact upon the $uality of reportin3 information: as utili8ed by in*estors tryin3 to employ capital into these countries?