ch1 Answer international accounting questions

ch1 Answer international accounting questions - Answers of...

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Answers of the Questions 1. How is international accounting distinct from domestic accounting? Answer: In the domestic case, accounting is an information service that provides financial information about a domestic entity to domestic users of that information. International accounting is distinctive in that the entity being reported on is either a multinational company with operations and transactions that transcend national boundaries or involves an entiiy with reporting obligations to readers who are located outside the reporting entity’s country of domicile. 2. What factors are contributing to the importance of international accounting as a field of study? Answer: Factors contributing to the internationalization of the subject of accounting include: the growth and spread of multinational operations around the world, the phenomenon of global competition, the increasing number of cross-border mergers and acquisitions that occur almost daily, continued advances in information technology, and the internationalization of the world’s capital markets. 3. What are the main issues related to International Trade? Answer: International trade involves importing and exporting activities. The major accounting issue associated with foreign trade involves accounting for foreign currency transactions. Foreign direct investment, on the other hand, involves conducting operations abroad. This activity exposes accountants to a new set of issues that run the gamut from having to consolidate foreign currency accounts based on diverse measurement rules to issues of evaluating the performance of foreign subsidiary managers. 4. International accounting issues have become more complex in recent years. (Argue). Answer: 1. International accounting issues have become more complex in recent years for several reasons. Financial transactions are becoming more complex, affecting both national and international accounting. For example, the use of complex financial instruments and developing accounting standards for these exotic
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This note was uploaded on 10/14/2011 for the course ACCT 909 taught by Professor N during the Spring '11 term at Abu Dhabi University.

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ch1 Answer international accounting questions - Answers of...

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