Question 1 

Which of the following statements is TRUE concerning the International Accounting Standards Board?

1.  It is an institution of the European Union designed to harmonize accounting in EU member countries.
2.  The EU has voted to not adopt IFRS issued by the IASB so that it will not hurt its own convergence efforts.
3.  The IASB and the FASB of the United States are working closely to harmonize accounting standards.
4.  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 _________.

1. conversion
2. translation
3. consolidation
4. 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 __________.

1. equity securities
2. debt financing
3. playing the stock market
4. investing in Euroequities

Question 4 

Which accounting systems are shaped more by government influence?

1. Macro-uniform accounting systems
2. Micro-based systems
3. Pragmatic business practice systems
4. 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 __________.

1. combination
2. evaluation
3. consolidation
4. unification of results

Question 6 

Home-country nationals are:

1. used a great deal abroad by polycentric companies.
2. citizens of the countries in which they are working.
3. citizens of the country where the company is headquartered.
4. 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 __________.

1. current-rate method
2. temporal method
3. translate-restate method
4. consolidation method

Question 8 

The balanced scorecard is:

1. when a company strikes a balance between high and low transfer prices.
2. an approach to performance measurement.
3. used widely by U.S. firms but not European firms.
4. not very successful at linking financial and nonfinancial performance.

Question 9 

The concept of leveraging in finance refers to:

1. the degree to which companies rely on foreign exchange to fund operations.
2. how a company hedges it foreign currency obligations.
3. the degree to which a firm funds the growth of a business by debt.
4. 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 __________.

1. transfer price
2. sale/resale price
3. global price
4. multidomestic price