31. "Adoption" means replacing current financial reporting standards with International Financial Reporting Standards.
Multiple Choice Questions
32. Accounting practices are affected by all of the following except:
A. Political systems
B. Economic systems
C. Technology and infrastructure
D. All of the above affect accounting systems
33. Establishing international accounting standards is the responsibility of
A. Securities and Exchange Commission
B. International Accounting Standards Board
C. Financial Accounting Standards Board
D. Accounting Association of America
34. Gains and losses from fluctuations in exchange rates should be shown on the
A. Balance sheet
B. Income statement
C. Statement of changes to owners' equity
D. Cash flow statement
35. On November 1 a French company purchased machinery from an American company for 800,000 euros when the exchange rate was $.83. When preparing financial statements on December 31 when the rate for the euros was $.88, what amount of gain or loss should the American company report?
A. $40,000 gain
B. $40,000 loss
C. $19,000 gain
D. No gain or loss would be reported
36. Of the following globalization strategies, which would be least demanding in terms of the quantity and variety of accounting information required?
A. Exporting.
B. International licensing.
C. Joint ventures.
D. Establishing a wholly owned foreign subsidiary.
37. Which of the following does not affect the cost associated with producing and selling goods and services in global markets?
A. Tariffs.
B. Duties.
C. Special trade zones.
D. All three affect the cost.
38. In Japan, financial reporting requirements are based primarily on the need to provide information to:
A. Investors.
B. Government agencies.
C. Banks.
D. U.S. subsidiaries of Japanese companies.
39. Which of the following organizations is responsible for developing uniform worldwide accounting standards?
A. The Securities Exchange Commission.
B. The International Accounting Standards Board.
C. The Financial Accounting Standards Board.
D. The International Organization of Accounting Boards.
40. Low individualism and high long-term orientation is indicative of which culture?
A. United States.
B. Great Britain.
C. Japan.
D. Germany.