International Accountancy Quiz Question from Test Bank

* Question 1 2. 5 out of 2. 5 points | | | The following inventory information above was taken from the records of BlobeKom Ltd. :Historical Cost             $12,000Replacement Cost         $ 9,000Expected selling price   $10,000Expected selling cost     $    500Normal profit margin     10% of selling priceUnder U. S. GAPP, what should the Balance Sheet report for Inventory? Answer| | | | | Selected Answer:|   $9,000| | | | | * Question 2 2. 5 out of 2. 5 points | | | How should the cost of borrowing funds to acquire or construct property, plant, and equipment be accounted for under IASB rules, as revised in 2007?

Answer| | | | | Selected Answer:|   It should be added to the other costs of acquiring fixed assets to determine the amount for the balance sheet. | | | | | * Question 3 2. 5 out of 2. 5 points | | | The following inventory information above was taken from the records of BlobeKom Ltd. :Historical Cost             $12,000Replacement Cost         $ 9,000Expected selling price   $10,000Expected selling cost     $    500Normal profit margin     10% of selling priceUnder IAS 2, what should the Balance Sheet report for Inventory?

Answer| | | | | Selected Answer:|   $9,500| | | | | * Question 4 2. 5 out of 2. 5 points | | | Under IAS 16 (Property, Plant, and Equipment), subsequent revaluation decreases are:Answer| | | | | Selected Answer:|   first recognized as a reduction in any related revaluation surplus| | | | | * Question 5 2. 5 out of 2. 5 points | | | Which of the following is generally true about the differences between U. S. GAAP and IASB standards? Answer| | | | | Selected Answer:|   U. S. GAAP tends to be more rule-based, and the IASB standards tend to be principles-based. | | | | * Question 6 2. 5 out of 2. 5 points | | | The “Seventh Directive” issued by the European Commission is a statement to the European Union (EU) members concerning:Answer| | | | | Selected Answer:|   Consolidated financial statements| | | | | * Question 7 2. 5 out of 2. 5 points | | | What basis does the International Accounting Standards Board use in formulating its IFRS? Answer| | | | | Selected Answer:|   A framework of accounting principles| | | | | * Question 8 2. 5 out of 2. 5 points | | | What was the “Norwalk Agreement? Answer| | | | | Selected Answer:|   A pledge between the Financial Accounting Standards Board in the U. S. and the IASB to make their reporting standards compatible| | | | | * Question 9 2. 5 out of 2. 5 points | | | How does IAS 34 (Interim Financial Reporting) differ from U. S. GAAP? Answer| | | | | Selected Answer:|   U. S. GAAP takes the position that interim periods are an integral part of the full year. | | | | | * Question 10 2. 5 out of 2. 5 points | | | Which of the following statements is true about accounting harmonizaiton?

Answer| | | | | Selected Answer:|   All of the above are true about accounting harmonization| | | | | * Question 11 2. 5 out of 2. 5 points | | | From a practical standpoint, what is the goal of accounting standards harmonization? Answer| | | | | Selected Answer:|   Reducing the conflict among national accounting standards| | | | | * Question 12 2. 5 out of 2. 5 points | | | Which of the following inventory valuation methods commonly used in the U. S. is NOT allowed under IAS 2 (Inventories)? Answer| | | | | Selected Answer:|   LIFO| | | | | * Question 13 . 5 out of 2. 5 points | | | Why does the IASB believe that a principles-based approach to standard setting is superior to a rules-based perspective? Answer| | | | | Selected Answer:|   Detailed prescriptions or rules encourage accountants to look for ways to circumvent the rules rather than trying to provide useful information. | | | | | * Question 14 2. 5 out of 2. 5 points | | | In which of the following countries is the use of IFRS not allowed for domestic companies listed on its stock exchanges? Answer| | | | | Selected Answer:|   United States| | | | * Question 15 2. 5 out of 2. 5 points | | | What types of issues cause differences between International Financial Reporting Standards and U. S. GAAP? Answer| | | | | Selected Answer:|   All of the above may be different between IFRS and U. S. GAAP| | | | | * Question 16 2. 5 out of 2. 5 points | | | According to the Framework for Preparation and Presentation of Financial Statements of the IASB, what is the definition of INCOME? Answer| | | | | Selected Answer:|   Increase in equity (other than from contributions by owners)| | | | * Question 17 2. 5 out of 2. 5 points | | | In 1990, the European Commission stopped issuing directives related to accounting. Why? Answer| | | | | Selected Answer:|   The EU was leaving the formulation of accounting standards up to the IASC. | | | | | * Question 18 2. 5 out of 2. 5 points | | | If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:Answer| | | | | Selected Answer:|   it must update the valuation so that the balance sheet represents fair value on the balance sheet date. | | | | * Question 19 2. 5 out of 2. 5 points | | | Which of the following items is considered to be the most significant impediment to accounting harmonization? Answer| | | | | Selected Answer:|   Nationalism| | | | | * Question 20 2. 5 out of 2. 5 points | | | According to IAS 16 (Property, Plant & Equipment), what is the term used to indicate the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction? Answer| | | | | Selected Answer:|   Fair market value| | | | |