International Accounting 4E Timothy DoupnikHector Perera Test Bank Chapter 002.docx
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InternationalAccounting4ETimothyDoupnikHectorPereraTestBankChapter002
Chapter02
WorldwideAccountingDiversity
MultipleChoiceQuestions
1.
WhatistheequivalentofthecommonstockaccountonaU.S.balancesheetonthebalancesheetofaBritishcompany?
A.
Capitalredemptionreserve
B.
Sharepremiumaccount
C.
Ownsharesheld
D.
Called-upsharecapital
2.
Whatdoes"harmonization"meaninthecontextofinternationalaccounting?
A.
Theprocessofcombiningthefinancialstatementsofforeignsubsidiariesintotheparentcompany'sfinancialstatements
B.
Theprocessofreducingaccountingdifferencesacrosscountries
C.
Disclosingtheaccountingmethodsusedinpreparingthefinancialstatements
D.
Assessingtheexposureresultingfrominadequateinternalcontrols
3.
Itisgenerallybelievedthatthe1997financialcrisisinEastAsiawaspartlyduetoaccountingfactorsinthatpartoftheworld.Whichofthefollowingaccountingvalueswaslackinginthatpartoftheworldandtherebycontributedtothecrisis?
A.
Professionalism
B.
Statutorycontrol
C.
Uniformity
D.
Transparency
4.
WhichofthefollowingisNOTaproblemcausedbyaccountingdiversity?
A.
Lackofqualifiedinternationalauditors
B.
Preparationofconsolidatedfinancialstatements
C.
Accesstoforeigncapitalmarkets
D.
Comparabilityoffinancialstatements
5.
Differencesinlegalsystemsusedinvariouscountrieshavebeencitedasonereasonfordiversityinaccountingpractices.Whatarethemajortypesoflegalsystems?
A.
Commerciallawandaccountinglaw
B.
Rulesandregulations
C.
Writtenlawandunwrittenlaw
D.
Commonlawandcodelaw
6.
Theaccountingstandardsincodelawcountriestendtobe:
A.
verydetailed.
B.
formulatedbyorganizationssuchastheFASB.
C.
statedgenerallywithoutmuchguidanceonaccountingprocedures.
D.
veryconservative.
7.
Whatislikelytobethesourceofaccountingstandardsincommonlawcountries?
A.
Taxlaw
B.
Non-governmententitiessuchastheFASB
C.
Federalandlocallegislatures
D.
TheInternationalAccountingStandardsBoard
8.
Whatisthelikelyresultwhenaccountingrulesareleftuptoprofessionalassociationsratherthanbeinglegislatedbygovernmentalbodies?
A.
Verygeneralaccountingrulesarecreated,asincodelawcountries.
B.
Verydetailedrulesforpracticearecreated,asincommonlawcountries.
C.
Verygeneralaccountingrulesarecreated,asincommonlawcountries.
D.
Verydetailedrulesforpracticearecreated,asincodelawcountries.
9.
RelativetoaccountingstandardsincountriessuchasGermany,whoseaccountinglawsareonly47pageslong,accountingpracticeintheU.S.isoftendescribedasbeingsubjectto:
A.
standardsoverload.
B.
standardsminimization.
C.
theoptimalamountofaccountingregulation.
D.
idealaccountingstandards.
10.
IncodelawcountriessuchasGermany,France,andJapan,taxlawandaccountingstandardstendtobe:
A.
unrelated.
B.
verydifferent.
C.
general.
D.
detailoriented.
11.
Ifmostofacountry'sbusinessfinancingcomesfromfamilies,banks,andthegovernment,whatshouldweexpectintermsofinformationdisclosuretothepublic?
A.
Relativelylittledisclosurebecausethepublicisn'tamajorfactor
B.
Agreatdealofdisclosurebecauseitwillbetheonlywayforinterestedpartiestolearnaboutthecompany
C.
Completeopennessofaccountingrecords
D.
Nodisclosureatall
12.
IncountriessuchastheU.S.,thereisgreatdemandforpublicdisclosureofaccountinginformation.Whatisthereasonforthis?
A.
Corporatemanagementisn'ttrustworthy.
B.
Businessesrelyheavilyonfinancingthroughissuanceofstocktothepublic.
C.
TheAmericanpopulaceisbetterabletoreadfinancialstatementsthanpeopleinothercountries.
D.
U.S.governmentofficialsaregenerallymembersofcorporateboardsofdirectorsandcangetalltheinformationtheyrequire.
13.
HistoricalcostistheprimarybasisforassetvaluationunderU.S.GAAP.WhyishistoricalcostNOTasimportantintheaccountingsystemsofLatinAmericaasintheU.S.?
A.
HistoricalcostsaretoodifficulttocalculateinthecurrenciesusedinCentralandSouthAmerica.
B.
ThecountriesofLatinAmericahaveexperiencedveryhighratesofinflation,whichwouldmakehistoricalcostsmeaninglesstoreadersoffinancialstatements.
C.
ThereisverylittleforeigndirectinvestmentinthecountriesofLatinAmerica,sofewassetsneedtobeaccountedfor.
D.
InLatinAmerica,assetpricesareverystable,makinghistoricalcostsequaltoreplacementcosts,soitdoesn'tmatterwhichvaluationbasisisused.
14.
IntheUnitedStates,conformitybetweenpresentationofthefinancialstatementsandthetaxstatementsisrequiredonlyfor:
A.
goodwill.
B.
depreciation.
C.
gainsorlossesonsecurities.
D.
theuseoftheLIFOinventorycostflowassumption.
15.
Insomecountries,financialaccountingandtaxaccountingaresocloselyrelatedthatthereisverylittleneedtoaccountfordeferredincometaxes.Whichofthefollowingcountrieshasafinancialaccountingsystemthatismostdifferentfromitstaxlaws?
A.
UnitedStatesofAmerica
B.
Japan
C.
Germany
D.
France
16.
IntheNobesclassificationofaccountingsystems,micro-basedaccountingsystemsareorientedtoward:
A.
governmenteconomics.
B.
businesspractices.
C.
taxlaws.
D.
codelaw.
17.
AccordingtotheresearchofChristopherNobes,themostrelevantfactorindeterminingthepurposeoffinancialreportingis:
A.
thefinancingsystemofthecountry.
B.
religiousdifferencesacrosscountries.
C.
thepopulationofthecountry.
D.
thestrengthofthecountry'saccountingprofession.
18.
AccordingtotheresearchofChristopherNobes,whatistheprimarydeterminantoftheaccountingsystemsindevelopingcountries?
A.
Thenatureoftheirfinancingsystem
B.
Theaccountingsystemofcountriesthatdominatetheirculture
C.
Thesizeoftheircapitalmarket
D.
Thestrengthoftheirtaxcode
19.
The"FairPresentation/FullDisclosureModel"isaclassificationschemeusedby:
A.
Germany.
B.
Japan.
C.
theUnitedStatesandtheUnitedKingdom.
D.
Brazil.
20.
Theextenttowhichhierarchyandunequalauthoritydistributionininstitutionsandorganizationsareacceptedwithinacultureisreferredtoas:
A.
uncertaintyavoidance.
B.
masculinity.
C.
individualism.
D.
powerdistance.
21.
Aculturalpreferenceforalooselyknitsocialfabricratherthanatightlyknitsocialfabricisreferredtoas:
A.
uncertaintyavoidance.
B.
masculinity.
C.
individualism.
D.
powerdistance.
22.
Aculturalemphasisonvaluesofperformanceandachievementratherthanvaluesofrelationships,caring,andnurturingisreferredtoas:
A.
uncertaintyavoidance.
B.
masculinity.
C.
individualism.
D.
powerdistance.
23.
Whattermisusedtorefertoaculturalaversiontoambiguoussituations?
A.
Uncertaintyavoidance
B.
Masculinity
C.
Powerdistance
D.
Individualism
24.
Aculturalpreferenceforaccountingsystemsthatrelyoncompliancewithlegalrequirementsiscalled:
A.
professionalism.
B.
uniformity.
C.
statutorycontrol.
D.
optimism.
25.
CountriessuchastheU.S.tendtovalueself-regulationofaccounting.Whattermisusedtodefinethissubculture?
A.
Uniformity
B.
Flexibility
C.
Conservatism
D.
Professionalism
26.
Whatdoes"transparency"meaninaccounting?
A.
Anemphasisonconfidentiality
B.
Restricteddisclosureofaccountinginformation
C.
Flexibilityintheapplicationofaccountingstandards
D.
Opennessofaccountinginformation
27.
Whattermisusedtodescribeaccountingstandardsthatencouragerisk-takinginfinancialreporting?
A.
Optimism
B.
Conservatism
C.
Professionalism
D.
Transparency
28.
InGray'sframeworkforaccountingsystemdevelopment,whichofthefollowingcountriestendstohavearelativelyhighdegreeoftransparencyintheircompanies'financialstatements?
A.
Germany
B.
Switzerland
C.
UnitedKingdom
D.
SaudiArabia
29.
InGray'sframeworkforaccountingsystemdevelopment,whichofthefollowingcountriestendstoshowarelativelyhighpreferenceforconservativeaccountingstandards?
A.
Norway
B.
UnitedKingdom
C.
UnitedStatesofAmerica
D.
Japan
30.
InGray'sframeworkforaccountingsystemdevelopment,optimismisavalueofaccountingstandardsthatwouldmostlikelybefoundin_____.
A.
Japan
B.
Australia
C.
Mexico
D.
Brazil
31.
InGray'sframeworkforac