International Accounting 4E Timothy DoupnikHector Perera Test Bank Chapter 007文档格式.docx
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Intheyearsbetween1990and2001whenglobalgrossdomesticproductrose27%,whatwasthegrowthinglobalexports?
25%
75%
35%
50%
3.
Whatisa"
foreignexchangerate?
"
Thepricetobuyaforeigncurrency
Thepricetobuyforeigngoods
Thedifferencebetweenthepriceofgoodsinaforeigncurrencyandthepriceinadomesticcurrency
Thecosttoholdallmonetaryassetsinasinglecurrency
4.
WhichofthefollowingstatementsistrueabouttheEuro?
ItisthecurrencyusedbyallcountriesintheEuropeanUnion.
ItispeggedtotheU.S.dollar.
Itisthecurrencyrequiredtobeusedinfinancialreportingunderinternationalaccountingstandards.
Noneofthestatementsaboveistrue.
5.
Abankexchangingforeigncurrencymakesitsprofitinwhatmanner?
Onthedifferencebetweenthespotrateandtheforeignrate
Abankisforbidden,bylaw,tochargeapremiuminforeigncurrencyexchange
Onthepresentvalueoftheforwardratediscountedtothedateanoptionispurchased
Onthedifferencebetweenthebuyingandsellingrates
6.
King'
sBank,aBritishcompany,purchasesmarketresearchservicesfromHarrisInteractive,aU.S.company.Asperthetermsofthecontract,paymentistobemadethreemonthslaterinU.S.dollarswhenthereportisdelivered.HowwouldKing'
sBankliketoseetheexchangeratemove,assumingitisn'
thedgingthetransaction?
IthopesthattheU.S.dollarappreciatesinvalueagainsttheBritishpound.
IthopesthattheBritishpoundappreciatesinvalueagainsttheU.S.dollar.
Itmakesnodifference,sincetheyarethecustomerandthesaletakesplaceintheU.K.
Ithopesthatthereisnochangebetweenthespotrateandtheforwardrate.
7.
Whywasthereverylittlefluctuationintheforeignexchangerateintheperiod1945-1973?
Thiswasaperiodwhentheworldeconomywasverystable.
Therewasverylittlegrowthintheworldeconomybetween1945and1973.
CountrieslinkedtheircurrencytotheU.S.dollar,whichwasbackedbygoldreserves.
MostcurrencieswerepeggedtotheBritishpound,whichcouldbeconvertedtosterlingsilver.
8.
ThecentralbankofCountryXbuysandsellsitsowncurrencytoensurethatthecurrencyisalwaysexchangedinaratioof2:
1withthecurrencyofCountryY.Whatcanweconcludeaboutthesetwocurrencies?
CountryXisusingtheEuro.
CountryXhaspeggeditscurrencytothecurrencyofCountryY.
CountryXhasanundesirablecurrency.
CountryXallowsitscurrencytofloatrelativetothecurrencyofCountryY.
9.
Whenacurrencyisallowedtoincreaseordecreasefreelyaccordingtomarketforces,thecurrencyissaidto:
bepeggedtoanothercurrency.
belessvaluable.
haveindependentfloat.
devalue.
10.
Foranupcomingtrip,PatwantstobuyEurosatthelocalbankwhenthecurrentexchangeratequotedonOANDA.comwas$1.563per€1.WhatshouldPatplantopayfor€1,000?
exactly$1,563
morethan$1,563
about$640
lessthan$640
11.
ThenumberofJapaneseyen(¥
)requiredtodaytobuyoneU.S.dollar($)todayiscalled:
thespotrate.
theexactrate.
theforwardrate.
theretailrate.
12.
ThenumberofU.S.dollars($)todaytobuyoneU.K.pound(£
)sixmonthsfromnowiscalled:
theprimerate.
13.
Whatisforeignexchangeriskexposure?
Thepossibilityofalossbecauseofchangesinthevalueofaforeigncurrency
Lossescausedbypayingforpurchasedgoodsinaforeigncurrency
Lossescausedbyreceivingpaymentinaforeigncurrencyforgoodssold
Alloftheabove
14.
Whatis"
assetexposure"
toforeignexchangerisk?
Thepossibilitythatanassetdenominatedindomesticcurrencywilldeclineinvaluebecauseofchangesintheforeignexchangerate
Thepossibilitythatanassetdenominatedinaforeigncurrencywillchangeinvaluebecauseofachangeintheforeignexchangerate
Thelossresultingfromanimportpurchasewhenaforeigncurrencyappreciates
Thelossresultingfromanimportpurchasewhenaforeigncurrencydepreciates
15.
Whatisaforeigncurrencytransaction?
Itisanothernameforaninternationaltransaction.
Itisatransactionthatinvolvespaymentatadatesometimeinthefuture.
Itisabusinessdealdenominatedinacurrencyotherthanacompany'
sdomesticcurrency.
ItisaneconomiceventmeasuredinacurrencyotherthanU.S.dollars.
16.
UnderU.S.GAAP,whatmethodisrequiredtoaccountforforeigncurrencytransactions?
Aone-transactionperspectivemustbeused.
Thetwo-transactionperspectivemustbeused.
AsaleisnotrecordeduntilpaymentisreceivedandconvertedtoU.S.dollars.
Asaleisnotrecordeduntilpaymentisreceivedintheforeigncurrency.
17.
UnderInternationalAccountingStandardsBoardrules,whatmethodisrequiredtoaccountforforeigncurrencytransactions?
18.
Whymustthetwo-transactionperspectivebeusedforrecordingforeigncurrencytransactionsunderU.S.GAAP?
Thetwo-transactionperspectiveisrequiredunderIFRS.
U.S.GAAPrequiresconservatisminfinancialreporting.
Allothermethodsareexcessivelycomplicatedtouseandthereforeobscuretheessenceofthetransaction.
Managementmadetwodecisions:
onetosellandanothertoextendcreditinaforeigncurrency.
19.
UnderU.S.GAAP,foreignexchangelossesshouldberecordedby:
debiting"
ForeignExchangeLoss"
.
crediting"
RetainedEarnings"
SalesRevenue"
20.
UnderU.S.GAAP,whatisthepropertreatmentofunrealizedforeignexchangelosses?
TheyshouldbedeferredontheBalanceSheetuntilthecashispaid.
Theyshouldnotberecognizeduntilcashisreceivedtocompletethetransaction.
TheyshouldberecordedontheIncomeStatementintheperiodtheexchangeratechanges.
TheyshouldbedeferredontheBalanceSheetuntilanoffsettingforeignexchangegainisrealized.
21.
UnderU.S.GAAP,whatisthepropertreatmentofunrealizedforeignexchangegains?
TheyshouldbedeferredontheBalanceSheetuntilcashisreceived.
Theprincipleofconservatismrequiresthattheyshouldneverberecognized.
Theyshouldnotberecordeduntilcashisreceivedandtheexchangetransactioniscompleted.
Theyshouldberecognizedinincomeonthedatetheexchangeratechanges.
22.
Whyistheaccrualmethodofaccountingforunrealizedforeignexchangegainssometimescriticized?
Foreignexchangegainsalmostneveroccur,sothereisnoreasontohaveanaccountingstandardforit.
Itviolatestheprincipleofconservatism.
Itisnotobjective.
Thereisnoreliablemethodformeasuringunrealizedforeignexchangegains.
23.
HowshouldU.S.companiesrecordreceivablesandpayablesfrominternationaltradethataredenominatedinforeigncurrencies?
AllassetsandliabilitiesofU.S.companiesmustberecordedinU.S.dollars.
Conservatismwoulddictatethatliabilitiesshouldberecordedinthecurrencyinwhichtheyarepayable,butassetsshouldberecordedinU.S.dollars,regardlessofwhatcurrencywillbereceived.
Thereshouldbeseparatereceivableandpayableaccountsforeachcurrencythatisusedbythecompany.
Thecompanyshouldchooseanyonecurrencytouseforrecordingreceivableandpayablessothatthereisconsistencyintheaccounts.
24.
NorthlandCorporationrecorded£
1,000,000inAccountsReceivableforsalestocustomersintheUnitedKingdomandrecordedAccountsPayableof2,000,000YuanforproductpurchasedfromChina.IfNorthlandrecordedaforeigncurrencyexchangelossonitsreceivablesandaforeigncurrencygainonitspayables,whatmusthavehappenedtoeachcurrency?
Yuanappreciated,Pounddepreciated
Yuandepreciated,Poundappreciated
Yuanappreciated,Poundappreciated
Yuandepreciated,Pounddepreciated
25.
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