Sample_Questions_Exam_II

Sample_Questions_Exam_II - Sample Questions- Final Exam...

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Sample Questions- Final Exam Multiple Choice This is a small sample of some of the varieties of form of multiple choice questions that will be on the exam. Note that some of them are quantitative and some of them require you to interpret the impact or implication of a standard or method. The sample questions provided here are not comprehensive, especially as to content or difficulty. Some of the multiple choice exam questions on the exam may be more difficult than these sample questions. Even when they are the same, the exam questions will probably be more difficult since you will be answering them under exam conditions, e.g., when you are working under the stress of a clock. A few more multiple choice sample questions are also available in the assigned homework, i.e., Chapter 6 and 7, exercises 1-10 and 1-7, respectively. 1. The central bank of Country X buys and sells its own currency to ensure that the currency is always exchanged in a ratio of 2:1 with the currency of Country Y. What can we conclude about these two currencies? A) Country X is using the Euro. B) Country X has pegged its currency to the currency of Country Y. C) Country X has an undesirable currency. D) Country X allows its currency to float relative to the currency of Country Y. E) None of the above Answer: B 2. Which of the following statements is true about the Euro? A) It is the currency used by all countries in the European Union. B) It is pegged to the U.S. dollar. C) It is the currency required to be used in financial reporting under international accounting standards. D) Only A and C are true. E) None of the above are true Answer: D 3. Under U.S. GAAP, what method is required to account for foreign currency transactions? A) A one-transaction perspective must be used. B) The two-transaction perspective must be used. C) A sale is not recorded until payment is received and converted to U.S. dollars. D) A sale is not recorded until payment is received in the foreign currency. E) None of the above Answer: B
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4. Under U.S. GAAP, what is the proper treatment of unrealized foreign exchange gains? A) They should be deferred on the Balance Sheet until cash is received. B) The principle of conservatism requires that they should never be recognized. C) They should not be recorded until cash is received and the exchange
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This note was uploaded on 10/07/2011 for the course ACCOUNTING 4220 taught by Professor Brown during the Spring '11 term at UMBC.

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Sample_Questions_Exam_II - Sample Questions- Final Exam...

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