This quiz works best with JavaScript enabled. Home > Accounting > International Accounting > International Accounting – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Accounting Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Historical cost is the primary basis for asset valuation under U.S. GAAP. Why is historical cost NOT as important in the accounting systems of Latin America as in the U.S.? A) Historical costs are too difficult to calculate in the currencies used in Central and South America. B) The countries of Latin America have experienced very high rates of inflation, which would make historical costs meaningless to readers of financial statements. C) There is very little foreign direct investment in the countries of Latin America, so few assets need to be accounted for. D) In Latin America, asset prices are very stable, making historical costs equal to replacement costs, so it doesn't matter which valuation basis is used. Show Answer Correct Answer: B) The countries of Latin America have experienced very high rates of inflation, which would make historical costs meaningless to readers of financial statements. 2. All of the following are characteristics of the strategic planning process EXCEPT the A) Emphasis on long run. B) Analysis and review of departmental budgets. C) Review of attributes and behaviour of the organisation's competition. D) Analysis of external economic factors. E) Analysis of competitor's strength. Show Answer Correct Answer: B) Analysis and review of departmental budgets. 3. What is the normal effect on the numbers of cost pools and allocation bases when an Activity-Based Costing system replaces a traditional cost system?Cost Pools / Allocation Bases A) No effect/no effect. B) Increase/no effect. C) No effect/increase. D) Increase/increase. E) Increase/decrease. Show Answer Correct Answer: D) Increase/increase. 4. When is the International Accounting day A) Nov 10. B) Oct 10. C) Sept 10. D) Dec 10. Show Answer Correct Answer: A) Nov 10. 5. At present, there is no resistance to the development of international accounting A) T. B) F. Show Answer Correct Answer: B) F. 6. Indian Accounting Standard used converge option to comply with IFRS A) True. B) False. Show Answer Correct Answer: A) True. 7. Until 2008 Mexico used which of the following bases for fixed asset valuation? A) Historical cost. B) Historical cost later restated in terms of GPP. C) Current replacement cost. D) Et realizable value. Show Answer Correct Answer: B) Historical cost later restated in terms of GPP. 8. Activity Based Costing can be part of a Operating Costing System / Job Costing System A) Yes/Yes. B) No no. C) Yes/No. D) No/Yes. Show Answer Correct Answer: A) Yes/Yes. 9. What method of fixed asset valuation would most likely be used in countries that regularly experience high rates of inflation? A) Historical cost. B) Net realizable value. C) Fair value. D) Market value. Show Answer Correct Answer: A) Historical cost. 10. When budgets are used for performance evaluations and to set limits on spending, the process will often result in departments adding something "extra" to insure the budgets will be met. This "extra" ist A) Contribution margin. B) Added value. C) Gross profit. D) Budgetary slack. E) Net income. Show Answer Correct Answer: D) Budgetary slack. 11. A controllable expense A) Is an expected future expense, which will be different under various alternatives. B) Is an expense whose actual amount will not normally differ from the standard (budget) amount. C) Is one which is directly influenced at given level of managerial authority within a given time period. D) Is an expense which will remain semi variable in total over the relevant range in a given time period. E) Is always a discretionary cost (e.g. marketing). Show Answer Correct Answer: C) Is one which is directly influenced at given level of managerial authority within a given time period. 12. Which one of the following is LEAST likely to be an objective of a cost accounting system? A) Product costing. B) Inventory valuation for reporting purposes. C) Sales commission determination. D) Measuring cost of sales for reporting purposes. E) Measuring income and assets for reporting purposes. Show Answer Correct Answer: C) Sales commission determination. 13. The accounting standards in code law countries tend to be: A) Very detailed. B) Formulated by organizations such as the FASB. C) Stated broadly without much guidance on accounting procedures. D) Very conservative. Show Answer Correct Answer: C) Stated broadly without much guidance on accounting procedures. 14. ..... are the incremental costs to obtain a contract. In other words, these costs would not have been incurred without an effort to obtain a contract-for example, legal fees, sales commissions and similar. A) Asset to obtain a contract. B) Income to obtain a contract. C) Liabiltiies to obtain a contract. D) Costs to obtain a contract. Show Answer Correct Answer: D) Costs to obtain a contract. 15. Simpson Company manufactures and sells electric drills to the exacting specifications of various customers. During April Job 403 for the production of 1, 100 drills was completed at the following costs per unit:direct materials $ 10direct labor $ 8allocated factory overhead $ 12sum $ 30Final inspection of Job 403 disclosed 50 defective units and 100 spoiled units (normal spoilage). The defective drills were reworked at a total cost of $ 500 and the normal spoiled drills were sold to a jobber for $ 1, 500. What would be the unit cost of the good units produced on Job 403? A) $ 33. B) $ 28. C) $ 32. D) $ 29. E) $ 30. Show Answer Correct Answer: C) $ 32. 16. Budgetary slack in cost (expense) budgets can be described as A) The elimination of certain expenses to enhance budget income. B) The planned overestimation of budget expenses. C) The planned underestimation of budget expenses. D) Actual cost minus budgeted costs. Show Answer Correct Answer: B) The planned overestimation of budget expenses. 17. The term that best refers to past costs that have been incurred and are not relevant to any future decision is A) Discretionary costs. B) Incurred marginal costs. C) Underallocated indirect costs. D) Sunk costs. Show Answer Correct Answer: D) Sunk costs. 18. In which year did International Accounting Standards (IAS) come into effect? A) 1947. B) 1953. C) 1973. D) 2021. Show Answer Correct Answer: C) 1973. 19. A firm's statement of broad objectives or mission statement should accomplish all of the following EXCEPT A) Outlining specific strategies for technological development, market expansion and product differentiation. B) Defining the goal(s) of the company. C) Stating the moral and ethical principles that guide the actions of the firm. D) Providing an overall guide to those in high-level, decision making positions. E) Ambitions of the company. Show Answer Correct Answer: A) Outlining specific strategies for technological development, market expansion and product differentiation. 20. The appropriate method for the dispostion of under/overapplied factory overhead is A) To cost of goods sold only. B) To finished goods inventory only. C) Apportioned to finished goods sold and finished goods inventory. D) A miscellaneous expense. E) Depends on the significance of the amount. Show Answer Correct Answer: E) Depends on the significance of the amount. ← PreviousNext →Related QuizzesAccounting QuizzesInternational Accounting Quiz 1International Accounting Quiz 3International Accounting Quiz 4International Accounting Quiz 5International Accounting Quiz 6International Accounting Quiz 7International Accounting Quiz 8International Accounting Quiz 9International Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books