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Question;1.;The Internal Revenue Code regulates transfer pricing;in the United States by encouraging the use of a transfer price that;a.;reflects what the price would have been if the;underlying transaction was between unrelated parties.;b.;shifts all income to the United States based;company.;c. maximizes;parent taxable income regardless of where the parent corporation is;incorporated.;d. shifts all income to the;highest income tax jurisdiction.;2.;A manufacturer produced a good with a value of 250;the retailer added 125 to the value of the good. Assuming the value added tax;rate is 15% the net value added tax due to the government by the retailer is;a.;37.50;b.;18.75;c.;56.25;d. 0;3.;A;manufacturer produced a good with a value of 300, the retailer added 140 to the;value of the good. Assuming the value added tax rate is 10% the final price to;the consumer would be;a.;470;b.;484;c.;517;d. 454;4.;Parent Corporation is located in a country with an;income tax rate of 40%. Subsidiary Company is located in a country with an;income tax rate of 25%. The best tax strategy for the enterprise would be to;set the transfer prices on sales of goods from the subsidiary to the parent at;a price that is;a. higher than;the price that would be in effect for unrelated parties in an arms length;transaction.;b.;lower than the price that would be in effect for;unrelated parties in an arms length transaction.;c. equal to the;price that would be in effect for unrelated parties in an arms length;transaction.;d. transfer prices do not affect;overall tax paid.;Chapter 9;5.;The International Accounting Standards Board (IASB);works to formulate international accounting standards that are adopted by each;country;a.;when approved by the IASB.;b.;when accepted by the majority of IASB member;countries.;c.;on a voluntary basis.;d. only after acceptance by 2/3;of IASB member countries.;6.;Latin;accounting principles tend to result in;a.;very conservative accounting measurements.;b.;less descriptive and more secretive accounting;disclosure.;c.;high reliance on historical cost measures.;d. a low level of constancy;with tax regulations.;7.;When;accounting for investments using the equity method, which country's accounting;system determines significant influence when an investor has acquired more than;10% of the voting stock?;a.;United States;b.;Mexico;c.;Japan;d. Germany;8.;The;main difference between U.S. accounting standards and international accounting;standards when accounting for plant, property and equipment is;a.;international accounting standards require the use;of current fair value with changes recognized in equity only.;b.;U.S. accounting standards do not allow the;write-down of assets due to impairment.;c.;international accounting standards allow plant;property and equipment to be stated at current fair value with changes;recognized in income or equity.;d. U.S.;accounting standards allow plant, property and equipment to be stated at;current fair value with changes recognized in income or equity.;9.;Which of the following statements best;differentiates multinational firms from domestic firms?;a.;Multinational firms have overseas sales offices.;b.;Multinationals engage in both importing and;exporting.;c. Multinational;firms have one or more plant(s) in a foreign country.;d. Multinational;business people make use of worldwide sales, capital, and labor markets.;9-2;Chapter 9;10. Which of;the following factors has NOT influenced the development of accounting;practices in various nations?;a.;the political environment;b.;economic development;c.;cultural background;d.;all of these factors have influenced the development;of accounting practices;11.;Which of the following accounting areas is NOT;significantly affected by international activity?;a.;overhead allocation;b.;recognition principles;c.;auditing standards;d. all are significantly;affected;12.;Why would a U.S. manufacturing firm select a foreign;site for one of its plants?;a.;The site is closer to the product market area;b.;Labor costs are more favorable;c.;The foreign country's tax environment is more;attractive;d.;All of these factors could influence a firm's;decision to manufacture overseas.;13. Which of the;following countries has accounting standards that most result in consistency;with the country's tax accounting policies?;a.;Mexico;b.;United Kingdom;c.;United States;d. Israel;14.;Which of the following countries has the strongest;requirements concerning inflation-adjusted financial statements?;a.;France;b.;Brazil;c.;Canada;d. United States;15.;Which of the following accounting situations is;treated virtually identically under both U.S. and International accounting;standards?;a.;earnings per share;b.;inventory;c.;plant, property and equipment;d. business combinations;9-3;Chapter 9;16. A value added tax generally;results in;a.;taxes applied only at the wholesale level.;b.;taxes applied at each stage of production.;c.;taxes applied only at the retail level.;d. double taxation of;distributions to owners.;17.;The most significant difference between accounting;principles used in Brazil and those employed in the United States is;a.;accounting for inflation.;b.;depreciation accounting.;c. the fact;that consolidated financial statements are not issued in Brazil.;d. the fact that Brazilian;corporations do not pay income tax.;18.;Which of the following does not describe a cultural;classification used to describe accounting systems?;a.;Nordic accounting;b.;Latin accounting;c.;North American accounting;d. Asian accounting

 

Paper#44388 | Written in 18-Jul-2015

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