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International Accountancy Quiz Question from Test Bank

Topics: International Financial Reporting Standards, Balance sheet, International Accounting Standards Board Pages: 5 (819 words) Published: November 19, 2012
* 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|

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* 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|

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* 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|

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* 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. |

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* 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|

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* 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|
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* 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|

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* 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.|

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* 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|
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* 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|
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* 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|
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* Question 13
2.5 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.|

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