Chapter 9—The International Accounting Environment Key
1. A U.S. company purchases medical lab equipment from a Japanese company. The Japanese company
requires payment in Japanese yen. In this transaction, the yen would be referred to as the ___________
currency.
2. A U.S. company purchases medical lab equipment from a Japanese company. The Japanese company
requires payment in Japanese yen. In this transaction, the dollar would be referred to as the ___________
currency.
3. RWB Corporation, a U. S. based company, sold inventory to a German company on June 5 for 12,000 euros,
when $1 was equal to 1.20 euros. The company received 12,000 euros in payment on August 4 when $1 was
equal to 1.25 euros. RWB’s measurement currency is the U. S. dollar. RWB Corporation:
4. RWB Corporation, a U. S. based company, bought inventory from a German company on June 5 for 12,000
euros, when $1 was equal to 1.20 euros. The company settled its payable with 12,000 euros on August 4 when
$1 was equal to 1.25 euros. RWB’s measurement currency is the U. S. dollar. RWB Corporation:
5. The process of expressing a subsidiary’s financial statement amounts denominated in a foreign currency into
amounts measured in the reporting currency of its parent company is referred to as:
6. Translation of a foreign entity’s financial statements into the reporting currency of a domestic entity is
typically done
7. Which of the following factors has not influenced the development of accounting practices in various
nations?
8. Which of the following is not a responsibility of the International Accounting Standards Board (IASB)?
9. One of the challenges facing U. S. companies adopting IFRS is:
10. Which of the following is true regarding the Securities and Exchange Commission requirements from
foreign companies seeking to sell securities on U.S. stock markets?
11. Describe the complexities stemming from U. S.-based companies operating in an international
environment.
12. Explain the factors which have lead to the differences in accounting standards among nations.
13. Explain the goal of harmonization of accounting standards. Why is this so important to multinational
companies?
14. Describe the concept of convergence as it pertains to the FASB and IASB and describe the ways in which
this may be accomplished.