Acct 883/483 International Accounting Sample Exam Multiple Choice 1. How is the term “stocks” used on the balance sheet of a British company? A) Capital stock in the Owners' Equity section B) Shares of another company owned as marketable securities. C) Fixed assets D) Inventory Answer: D Level: Medium LO: 1 2. A study conducted by the SEC in 1993 illustrated that U.S. GAAP was more conservative for most of the foreign entities listed on U.S. exchanges. What does this mean? A) Income restated under U.S. GAAP was higher than income under GAAP of the companies' home countries. B) Income restated under U.S. GAAP was lower than income under GAAP of the companies' home countries. C) Income reported under U.S. GAAP is more accurate than income reported under GAAP of other countries. D) Assets were understated when restated using U.S. GAAP. Answer: B Level: Medium LO: 2 3. Differences in legal systems used in various countries have been cited as one reason for diversity in accounting practice. What are the major types of legal systems? A) commercial law and accounting law B) rules and regulations
C) written law and unwritten law D) common law and code law
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