International Accounting

Which of the following factors is likely to be an area of difficulty in a large multinational group of

companies?

(a) Compliance with international accounting standards.

(b) Foreign currency translation.

(c) The preparation of the group financial statements.

(d) All of the above

. Which of the following factors is not a defect of the traditional historical cost method of accounting

under inflationary conditions?

(a) Assets which have not been revalued are recorded at historic cost.

(b) Debtors and other monetary assets lose value with inflation.

(c) Asset values are objectively recorded at historic cost.

(d) Depreciation charges tend to be understated if based on the historic cost of fixed assets

What basic financial statements can be found in a corporate annual report? |

| |

  |    | Balance sheet, auditor's report and income statement. |

   | Balance sheet, income statement, statement of shareholders' equity, and statement of cash flows. |

   | Earnings statement and statement of retained earnings. |

   | Statement of cash flows and five-year summary of key financial data. |

|

| |

| | |

| | |

| |

What information can be found on a balance sheet? |

| |

  |    | The financial position on a particular date; i.e. assets, liabilities and shareholders' equity. |

   | Information to support that assets equal liabilities. |

   | The profit or loss for the accounting period. |

   | The reasons for changes in the cash account. |

|

| |

| | |

| | |

| |

What information can be found on an income statement? |

| |

  |    | Cash inflows and cash outflows. |

   | Revenues, expenditures, net profit or loss and net profit or loss per share. |

   | The financing and investing activities during an accounting period. |

   | A reconciliation of the beginning and ending balances of all revenue accounts. |

|

| |

| | |

| | |

| |

Where are the possible places...