Ch. 2 - invented questions

Question 1

What is accounting?

A: the process of identification, measurement, and communication of information about economic entities to interested people

B: A method used only for predicting future stock market trends based on past performance.

C: The practice of managing personal expenses and budgeting for everyday purchases.

D: A process that involves only the calculation of taxes and financial statements for government use.

Answer 1

A

the definition is: the process of identification, measurement, and communication of information about economic entities to interested people

Question 2

Main function of financial accounting?

A:Predicting future stock prices.

B:Managing employee payroll.

C:Tracking marketing expenses.

D:Determination of dividend payments.

Answer 2

D

The functions of financial accounting are:
- documentation
- information
- determination of dividend payments
- determination of taxable income

Question 3

What are the major determinants of national accounting systems?

A:Employee benefits, Interest rate changes, Product development.

B:Marketing strategies, Corporate Social Responsibility, Budgeting methods.

C: Legal System, Ownership and Capital Market Structure, Taxation, Dominant View of Firms and their Purpose.

D:Trade policies, Climate change initiatives, Corporate branding.

Answer 3

C

Major Determinants:
* Legal System
* Ownership and Capital Market Structure
* Taxation
* Dominant View of Firms and their Purpose
Other Determinants:
* Political System
* History
* Economic and Social Development
* Size of Firms
* Importance of Inflation
* Culture
* Accounting Profession

Question 4

Factor driving the internationalization of accounting?

A: Local consumer preferences.

B: Globalisation of financial markets.

C: National labor laws.

D: Regional marketing campaigns.

Answer 4

B

Factors driving the internationalization
of accounting:
- Globalisation of markets for products and services
- Globalisation of company structures
- Globalisation of financial markets

some effects:
* Liberalisation of (financial) markets and trade
* Technological progress in information and communication technology
* Global trade imbalances
* Advances in financial technology
* Competition and innovation in financial markets

Question 5

When did IFRS become mandatory for consolidated financial statements of all listed companies in the EU?

A: 2005

B: 1998

C: 2000

D: 1995

Answer 5

A

Question 6

Which country does not use the IFRS system?

A: Japan

B: Germany

C: Canada

D: Australia

Answer 6

A