Accounting And Finance In The International Business

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Question 1

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Accounting information is the means by which firms communicate their financial position to the providers of capital.

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Question 2

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Accounting is shaped by the environment in which it operates.

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Question 3

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Banks are the most important source of external capital for business enterprises in the United States.

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Question 4

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Accounting standards are rules for preparing financial statements.

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Question 5

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Auditing standards are rules that define the accounting principles and monetary policy of a nation.

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Question 6

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IASB is a major proponent of international accounting standards.

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Question 7

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Compliance to IASB standards is mandatory for countries to engage in international trade.

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Question 8

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The standards of U.S.Financial Accounting Standards Board and IASB are vastly different.

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Question 9

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The budget is the main instrument of financial control in an organization.

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Question 10

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Most international businesses require all budgets and performance data within the firm to be expressed in the currencies of the countries where its subunits are located.

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Question 11

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A European subsidiary of a U.S.firm will usually prepare its budgets in Euro.

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Question 12

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The initial rate,in the Lessard-Lorange Model,refers to the spot exchange rate when the budget is adopted.

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Question 13

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The ending rate refers to the spot exchange rate forecast for the end of the budget period in the Lessard-Lorange Model.

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Question 14

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Using the ending rate to translate the budget is a valid practice according to the Lessard-Lorange Model.

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Question 15

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Lessard and Lorange recommend that firms use the projected spot exchange rate to translate both the budget and performance figures into the corporate currency.

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Question 16

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The projected rate will typically be the forward exchange rate as determined by the foreign exchange market when firms use the projected spot exchange rate to translate both the budget and performance figures into the corporate currency.

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Question 17

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The price at which goods and services are transferred between subsidiary companies in a multi-national firm is referred to as minimum retail price.

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Question 18

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Performance of international subsidiaries depends on the transfer price set-up by the corporate.

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Question 19

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Most subsidiaries of an international business operate in uniform environments.

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Question 20

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Evaluation of a subsidiary should not be separate from the evaluation of its manager.

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