ADVANCED ACCOUNTING
14th Edition
ISBN: 9781307664089
Author: Hoyle
Publisher: MCG/CREATE
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Chapter 11, Problem 2P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Which of the following is not a problem caused by diversity in accounting practices across countries?
Multiple Choice
Comparing companies in the same industry that are headquartered in different countries.
Translating foreign currency balances into U.S. dollars.
Converting local GAAP financial statements into U.S. GAAP for consolidation purposes.
Maintaining separate accounting records in both the local and U.S. GAAP.
Identifying and retaining personnel who are competent to prepare financial statements in both international and domestic accounting
standards.
1. What impact would harmonization of national accounting standards have on international businesses?
2. Are U.S. firms at a competitive disadvantage because they cannot use accounting reserves as German firms do?
Why do U.S. companies keep using LIFO while IFRS prohibits it?
a. LIFO provides a more realistic income statement since the most recent items purchased are what is measured on the income statement.
b. LIFO assigns less weight to the balance sheet.
c. The taxing authority in the U.S. has conformity provisions.
Chapter 11 Solutions
ADVANCED ACCOUNTING
Ch. 11 - Historically, what factors contributed to the...Ch. 11 - Nestl S.A. is a very large company headquartered...Ch. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 10QCh. 11 - Prob. 11QCh. 11 - Prob. 12QCh. 11 - What are the two extreme approaches that a company...Ch. 11 - Prob. 14QCh. 11 - Prob. 15Q
Ch. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 18QCh. 11 - Prob. 19QCh. 11 - Prob. 20QCh. 11 - Even if all companies in the world were to use...Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Which of the following is not a reason for...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Which of the following statements is true for a...Ch. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17P
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- What benefit does a country get out of remaining insularly and isolated in their accounting policies? (i.e. import policies, not following IFRS, etc.)arrow_forward2.Explain the environmental factors that lead to national differences in accounting. 3.What are the two main legal systems operating worldwide? How might these affect accounting? Countries that rely on capital markets for finance, as opposed to banks and governments, are likely to expect greater levels of public disclosure in their accounting systems. Evaluate this argument and provide examples. 5.Outline and discuss three cultural aspects that can differ across countries. How do these cultural differences relate to differences in accounting systems? 6.What does accounting harmonisation mean? Differentiate harmonisation from convergence or adoption. 7.Explain the benefits of global adoption of IFRSs. 8. Outline the key challenges of US GAAP and IFRS convergence.arrow_forwardWhich of the following statements regarding forfaiting is/are accurate? A. The costs associated with forfaiting are often higher than conventional financing B. Forfaiting is typically a short-term transaction, less than one year C. Forfaiting is readily available to small businesses D. Forfaiting eliminates commercial, political, and foreign exchange risks E. Both a and d are accurate In international trade disputes, this ADR relies on a third-party doing their analysis alone and imposing a binding decision A. Arbitration B. Mediation C. Litigation D. Conciliationarrow_forward
- A challenge facing U. S. companies adopting IFRS is ______________________________. a.certain areas exist where convergence may not be achieved b.all options are correct c.the costs incurred to do so d.the subjectivity introduced into financial reportingarrow_forward1.Outline and differentiate the various definitions of international accounting? 2.Explain the environmental factors that lead to national differences in accounting? 3.What are the two main legal systems operating worldwide? How might these affect accounting? 4.Countries that rely on capital markets for finance, as opposed to banks and governments, are likely to expect greater levels of public disclosure in their accounting systems. Evaluate this argument and provide examples.arrow_forwardWhat is the main purpose of common-size financial statements? a)To facilitate comparisons over time b)To facilitate comparison between different-sized firms c) To facilitate comparison between firms of different structure d) To remove the bias introduced by increasing revenuearrow_forward
- The following comments were made at an Annual Conference of the Financial Executives Institute (FEI).There is an irreversible movement toward the harmonization of financial reporting throughout the world. The international capital markets require an end to:1. The confusion caused by international companies announcing different results depending on the set of accounting standards applied.2. Companies in some countries obtaining unfair commercial advantages from the use of particular national accounting standards.3. The complications in negotiating commercial arrangements for international joint ventures caused by different accounting requirements.4. The inefficiency of international companies having to understand and use a myriad of different accounting standards depending on the countries in which they operate and the countries in which they raise capital and debt. Executive talent is wasted on keeping up to date with numerous sets of accounting standards and the never-ending changes…arrow_forwardIdentify a limitation to using ratio analysis when examining companies reporting under different accounting systems such as IFRS versus U.S. GAAP.arrow_forwardSome believe that International Financial Reporting Standards (IFRS) provide too many choices within its accounting guidance. Is this a possible concern in the area of cash flow reporting in your opinion?arrow_forward
- Economic consequences of accounting standard-setting means: a. standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard. b. standard-setters must ensure that no new costs are incurred when a new standard is issued. c. the objective of financial reporting should be politically motivated to ensure acceptance by the general public. d. accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.arrow_forwardWhich of the following statements is INCORRECT ? Large investment banks finance most of their activities by using retail consumer deposits as the primary source of funds. Failure to monitor the actions of firms in a timely and complete fashion after purchasing securities in the firms exposes investors to agency costs. As a delegated monitor, a financial institution's actions reduce agency costs. Financial institutions provide economies of scale in transaction costsarrow_forwardWhich one is not the fraudulent financial reporting? Select one: a. Cash shortage b. Lack of working capital c. Favourable industry economic condition d. Frequent changes of auditorarrow_forward
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