江西财经大学高级财务会计国际学院题库chapter_14

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1、AdvancedAccounting,11e(Beams/Anthony/Bettinghaus/Smith)Chapter14ForeignCurrencyFinancialStatementsMultipleChoiceQuestions1)AU.S.firmhasaBelgiansubsidiarythatusestheBritishpoundasitsfunctionalcurrency.AccordingtoGAAP,theU.S.dollarfromBelgianunit'spointofviewwill

2、beA)itsonlyforeigncurrency.B)itslocalcurrency.C)itscurrentratemethodcurrency.D)itsreportingcurrency.Answer:DObjective:LO1Difficulty:Easy2)SelveyInc.isawholly-ownedsubsidiaryofParsfieldIncorporated,aU.S.firm.ThecountrywhereSelveyoperatesisdeterminedtohaveahighly

3、inflationaryeconomyaccordingtoGAAPdefinitions.Therefore,forpurposesofpreparingconsolidatedfinancialstatements,thefunctionalcurrencyisA)itsreportingcurrency.B)itscurrentratemethodcurrency.C)theUSdollar.D)itslocalcurrency.Answer:CExplanation:C)Selveymustusethefun

4、ctionalcurrencyofthereportingentity.Objective:LO3Difficulty:Easy3)Allofthefollowingfactorswouldbeusedtodefineaforeignentity'sfunctionalcurrency,exceptA)highvolumeofintercompanytransactions.B)expensesforforeignentityprimarilydrivenbylocalfactors.C)financingforfo

5、reignentitydenominatedinlocalcurrency.D)foreignentity'sstatusasalocaltaxhavenfortransferpricingpurposes.Answer:DObjective:LO1Difficulty:Easy4)TheprimarygoalbehindconsolidatingfinancialstatementsofacontrolledsubsidiaryisA)assuringthatthesubsidiaryfinancialstatem

6、entsarethesameunderthetemporalmethodorthecurrentratemethod.B)assuringthattheindividualnatureofthesubsidiaryentityisnotlostintheconsolidation.C)representingtheconversionofstatementsatthehistoricalexchangerate.D)representingthecompany'sunderlyingeconomiccondition

7、.Answer:DObjective:LO2Difficulty:Easy42Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHall5)Pelmerhasaforeignsubsidiary,SappCorporationofGermany,whosefunctionalcurrencyistheeuro.Sapp'sbooksaremaintainedineuros.OnDecember31,2011,Sapphasanaccountreceivabl

8、edenominatedinBritishpounds.Whichoneofthefollowingstatementsistrue?A)BecauseallaccountsofthesubsidiaryaretranslatedintoU.S.dollarsatthecurrentrate,theAccountReceivableisnota