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1 | |
Selling a good or service to a foreign customer is called importing. |
| | A) | True |
| | B) | False |
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2 | |
Becoming aware of the impact of international activities on the future of a company is called globalization. |
| | A) | True |
| | B) | False |
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3 | |
The close coordination of research and development, manufacturing, and marketing across national boundaries is called global sourcing. |
| | A) | True |
| | B) | False |
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4 | |
A company owned by two or more companies from different countries is called an international joint venture. |
| | A) | True |
| | B) | False |
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5 | |
A contractual agreement between a company and a foreign party allowing the use of trademarks or patents is called international licensing. |
| | A) | True |
| | B) | False |
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6 | |
The strategic direction of planned globalization will have few implications for the type of accounting information gathered. |
| | A) | True |
| | B) | False |
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7 | |
In foreign trade zones, goods are duty free until they leave the zone. |
| | A) | True |
| | B) | False |
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8 | |
When a good is manufactured partially in countries that are members of the free trade agreement and partially in countries that are not, the regional value content requirements come into play. |
| | A) | True |
| | B) | False |
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9 | |
Cross-border financing occurs when a company sells its securities in the capital markets of another country. |
| | A) | True |
| | B) | False |
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10 | |
A joint venture manufacturing plant located in Mexico that enjoys exceptions from Mexican laws governing foreign companies is called a maquiladora. |
| | A) | True |
| | B) | False |
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11 | |
Goods imported into foreign trade zones, designated U.S. areas, are duty free until they leave the zone. |
| | A) | True |
| | B) | False |
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12 | |
Legal financial reporting requirements are substantially the same for the U.S. and Japan. |
| | A) | True |
| | B) | False |
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13 | |
The standardization of accounting methods and principles used in different countries throughout the world is called the harmonization of accounting standards. |
| | A) | True |
| | B) | False |
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14 | |
In market economies, ownership of land and means of production are private. |
| | A) | True |
| | B) | False |
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15 | |
A planned economy exists when the private sector uses central planning to allocate resources and determine output among various segments of the economy. |
| | A) | True |
| | B) | False |
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16 | |
When companies of some countries arrange themselves into conglomerates representing different industries they are called industrial organizations. |
| | A) | True |
| | B) | False |
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17 | |
Uncertainty avoidance, one of the several significant cultural variables identified by experts on culture, is scored very low by citizens in South American countries. |
| | A) | True |
| | B) | False |
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18 | |
Access to communication, transportation, and utilities provided to businesses in each global location is called infrastructure. |
| | A) | True |
| | B) | False |
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19 | |
The amount it costs to purchase one unit of currency with another currency is called the exchange rate. |
| | A) | True |
| | B) | False |
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20 | |
When the currency of Country A rises sharply against the currency of Country B, it indicates that the price (exchange rate) of the currency of Country B rose sharply. |
| | A) | True |
| | B) | False |
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21 | |
A U.S. company purchasing merchandise from a British country at a price of 8,000 British pounds, when the exchange rate is $1.40 per British pound, would record the transaction (perpetual inventory) as a debit to the Inventory account for $8,000. |
| | A) | True |
| | B) | False |
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22 | |
Gains and losses from fluctuations in exchange rates on transactions carried out in a foreign currency are included in the income statement as part of the income from operations. |
| | A) | True |
| | B) | False |
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23 | |
Accounts receivable in a foreign currency are contracts, commonly called futures. |
| | A) | True |
| | B) | False |
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24 | |
Taking offsetting positions so that your gains and losses tend to offset one another is called hedging. |
| | A) | True |
| | B) | False |
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25 | |
Global sourcing refers to the close coordination of research and development, manufacturing, and marketing across national boundaries. |
| | A) | True |
| | B) | False |
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26 | |
The Foreign Corrupt Practices Act prescribes fines and jail time for American managers who violate its rules. |
| | A) | True |
| | B) | False |
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27 | |
Under the Foreign Corrupt Practices Act (FCPA), a facilitating payment given to a customs official to expedite imported merchandise through customs is illegal. |
| | A) | True |
| | B) | False |
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28 | |
Globalization typically progresses through a series of stages that include which of the following? |
| | A) | Exporting |
| | B) | Wholly owned subsidiaries |
| | C) | Global sourcing |
| | D) | A and B |
| | E) | A, B, and C |
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29 | |
Which of the following is a contractual agreement between a company and a foreign party allowing the use of trademarks, patents, technology, designs, processes, intellectual property, or other proprietary advantage. |
| | A) | Hedging |
| | B) | Futures contract |
| | C) | International licensing |
| | D) | Regional value content |
| | E) | Maquiladora |
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30 | |
The international environmental forces that affect the accounting information measured, reported, and created include which of the following? |
| | A) | Political and legal systems |
| | B) | Culture |
| | C) | Technology and infrastructure |
| | D) | A and C |
| | E) | A, B, and C |
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31 | |
Legal reporting requirements vary significantly from country to country. In South America, financial reporting is oriented towards which of the following? |
| | A) | Providing useful information for investors and creditors. |
| | B) | The needs of governmental planning. |
| | C) | Providing useful information to banks that provide much of the capital. |
| | D) | A and C |
| | E) | B and C |
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32 | |
Which is charged with the responsibility of establishing and gaining acceptance of international accounting standards? |
| | A) | Foreign Trade Standards Committee |
| | B) | International Auditing Standards Committee |
| | C) | International Accounting Standards Committee |
| | D) | Foreign Accounting Standards Committee |
| | E) | None of the above |
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33 | |
Experts on culture have defined several significant variables that differ among international locations. Those that have significant implications for accounting production and use include which of the following? |
| | A) | Individualism versus collectivism |
| | B) | Uncertainty avoidance |
| | C) | Short- versus long-term orientation |
| | D) | Large versus small power distance |
| | E) | All of the above |
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34 | |
The statement 'A strong dollar rose sharply against the weakening British pound, but fell slightly against the Japanese yen and Swiss franc' means that in terms of the U.S. dollar? |
| | A) | The British pound fell sharply. |
| | B) | The Japanese yen rose sharply. |
| | C) | The Swiss franc fell slightly. |
| | D) | A and C |
| | E) | A and B |
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35 | |
A company recorded the purchase of inventory from a British company at a price of 10,000 British pounds, when the exchange rate per British pound was $1.44. The account payable was paid within the same accounting period, but the exchange rate had changed to $1.54. At the time of payment the company will recognize which of the following? |
| | A) | A Gain on Fluctuations in Foreign Exchange Rates |
| | B) | A Loss on Fluctuations in Foreign Exchange Rates |
| | C) | No gain or loss in foreign exchange rate fluctuations |
| | D) | A debit to Accounts Payable for $15,400 |
| | E) | B and D |
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36 | |
A U.S. company sold merchandise to a British company at a price of 10,000 pounds when the exchange rate was $1.61 per British pound. The receivable was collected within the same accounting period, but the exchange rate had changed to $1.58. At the time of collection, a U.S. company would recognize which of the following? |
| | A) | Gain on Fluctuations in Foreign Exchange Rates |
| | B) | Loss on Fluctuations in Foreign Exchange Rates |
| | C) | No gain or loss in foreign exchange rate fluctuations |
| | D) | Credit to Accounts Receivable for $16,100 |
| | E) | B and D |
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37 | |
A U.S. company sold merchandise to a British company at a price of 10,000 pounds when the exchange rate was $1.58 per British pound. At year-end, the exchange rate was $1.62. All year-end adjusting entries to Gains (or Losses) on Fluctuations in Foreign Exchange Rates were made. When the receivable was collected in the subsequent accounting period, the exchange rate was $1.60. At the time of collection a U.S. company would recognize which of the following? |
| | A) | Gain on Fluctuations in Foreign Exchange Rates |
| | B) | Loss on Fluctuations in Foreign Exchange Rates |
| | C) | No gain or loss in foreign exchange rate fluctuations |
| | D) | Credit to Accounts Receivable for $16,000 |
| | E) | B and D |
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38 | |
There are two basic approaches to avoiding losses from fluctuations in foreign exchange rates. The approaches include which of the following? |
| | A) | Hedging |
| | B) | Buying or selling futures |
| | C) | Ignoring the exchange rates, stating everything in U.S. dollars |
| | D) | Selling goods in foreign markets when the exchange rate is favorable |
| | E) | A and C |
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2002 McGraw-Hill Higher Education