What role does the unit of measurement assumptionplay in multinational accounting?a) It requires translation of foreign operations intoreporting currencyb) It only applies to domestic transactionsc) It prohibits foreign currency transactionsd) It requires all transactions in gold standard

Answer: (a) It requires translation of foreign operations into reporting currencyExplanation:The…

Answered: What role does the unit of measurement…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA1: International Financial Reporting Standards

Section: Chapter Questions

Problem 6MCQ

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Q1. Explain the differences between translation and remeasurement of financial statements of a foreign subsidiary.
What benefit does a country get out of remaining insularly and isolated in their accounting policies? (i.e. import policies, not following IFRS, etc.)
Discuss the accounting treatment for foreign currency transactions. How do changes in exchange rates affect a company's financial statements? Expert need your help
Maintaining a foreign currency account is helpful to avoid O a. Exchange risk and domestic currency depreciation O b. Transaction cost only. O c. Both transaction cost and exchange risk. O d. Exchange risk only.
Choose the correct. Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.
When are foreign currency transaction gains or losses required to be recognized in the financial statements, how are they to be disclosed and where in the financial statements?
Financial institutions engage in the purchasing and selling of foreign currencies for all of the following reasons except to: a. Hedge against foreign exchange exposures. b. Allow customers access to foreign markets to transact business. c. Avoid trading in speculative investments. d. Allow itself and/or customers to trade and invest in foreign financial markets.
If you have a choice, at which point will you enter into such forward contracts for hedging purposes? Would you prefer hedging against expected cashflow (before you even sign a contract with any foreign company), against firm commitment (after you have signed the contract, but before delivery of goods) or against an account payable or account receivable (after delivery of goods)? Why?
Leads are deliberate early payments of amounts due to be paid in foreign currency to overseas suppliers, or other foreign currency payments. Leads can avoid the risk that the sterling cost of these payments may rise if the amounts of the payments are quoted in foreign currency and the foreign currency increases in value Under what circumstances can how an international company can use ‘leads and lags’ to protect itself against foreign exchange risk.
A. 61. Which of the following statements about international accounting standards is true? A. Accounting professionals in the USA consider US GAAP superior to IAS and has nointention to adopt International Accounting Standards.B. The IASB is able to enforce its standards by prohibiting the listing of companies which donot comply on stock exchanges which sell internationally.C. The International Accounting Standards Board (IASB) was established with the purposeof narrowing the range of divergence in accounting standards throughout the world.D. Legal and psychological hurdles to achieving common reporting standards will be fullyovercome by the year 2012, the time frame set for convergence between IAS and USGAAP.
Describe the following: 1)Recording of previous periods errors in revenue and expenditure after preparation of final accounts in the current periods. 2)Gain or losses on foreign exchange translations.
Which of the following factors are related to an ADR? Factor -1: An ADR is a certificate that represents ownership of a foreign stock. An ADR is typically created by a U.S. bank who buys stock in foreign corporations in their domestic currencies and places them in its vault. Factor - 2: The major attraction to U.S. investors is that ADRs are claims to foreign companies that trade on domestic (U.S.) exchanges and in dollars. A. Only Factor 1 is correct B.Only Factor 2 is correct C.Both Factors are correct D-Neither Factor is correct.

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What role does the unit of measurement assumption play in multinational accounting? a) It requires translation of foreign operations into reporting currency b) It only applies to domestic transactions c) It prohibits foreign currency transactions d) It requires all transactions in gold standard