International Accountancy Quiz Question from Test Bank
2.5 out of 2.5 points
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| 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
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| 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.|
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* Question 3
2.5 out of 2.5 points
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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
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| 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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