Đề thi trắc nghiệm Tài chính công ty đa quốc gia (tiếng anh)

Đề thi trắc nghiệm Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ Đề thi Tài chính công ty đa quốc gia (tiếng anh) Đề thi Tài chính công ty đa quốc gia cho các trường ĐH CĐ

Fundamentals of Multinational Finance , 3e (Moffett) Chapter 11 11.1 Translation Exposure Multiple Choice and True/False Questions 1) Translation exposure may also be called exposure A) transaction B) operating C) accounting D) currency Answer: C Topic: Translation Exposure Skill: Recognition 2) exposure is the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last transaction A) Transaction B) Operating C) Currency D) Translation Answer: D Topic: Translation Exposure Skill: Recognition 3) Translation exposure measures A) changes in the value of outstanding financial obligations incurred prior to a change in exchange rates B) the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last consolidation of international operations C) an unexpected change in exchange rates impact on short run expected cash flows D) none of the above Answer: B Topic: Translation Exposure Skill: Recognition 4) According to your authors, the main purpose of translation is A) to prepare consolidated financial statements B) to help management assess the performance of foreign subsidiaries C) to act as an interpreter for managers without foreign language skills D) none of the above Answer: A Topic: Translation Exposure Skill: Recognition 5) It is possible to use different exchange rates for different line items on a financial statement Answer: TRUE Topic: Exchange Rate Accounting Skill: Conceptual 6) If the same exchange rate were used to remeasure every line on a financial statement, then there would be no imbalances from remeasuring Answer: TRUE Topic: Translation Exposure Skill: Conceptual 7) Historical exchange rates may be used for , while current exchange rates may be used for A) fixed asses and current assets; income and expense items B) equity accounts and fixed assets; current assets and liabilities C) current assets and liabilities; equity accounts and fixed assets D) equity accounts and current liabilities; current assets and fixed assets Answer: B Topic: Translation Exposure Skill: Conceptual 8) If an imbalance results from the accounting method used for translation, the imbalance is taken either to or A) the bank; the post office B) depreciation; the market for foreign exchange swaps C) current income; equity reserves D) current liabilities; equity reserves Answer: C Topic: Accounting for Translation Error Skill: Conceptual 9) Generally speaking, translation methods by country define the translation process as a function of what two factors? A) size; location B) a firm's functional currency; location C) location; foreign subsidiary independence D) foreign subsidiary independence; a firm's functional currency Answer: D Topic: Factors of Translation Method Skill: Recognition 10) A/an subsidiary is one in which the firm operates as an extension of the parent company with cash flows highly interrelated with the parent A) self sustaining foreign B) integrated foreign entity C) foreign D) none of the above Answer: B Topic: Integrated Foreign Entity Skill: Recognition 11) Consider two different foreign subsidiaries of Georgia-Pacific Wood Products Inc The first subsidiary mills trees in Canada and ships its entire product to the Georgia-Pacific U.S The second subsidiary is also owned by the parent firm but is located in Japan and retails tropical hardwood furniture that it buys from many different sources The first subsidiary is likely a/an foreign entity with most of its cash flows in U.S dollars, and the second subsidiary is more of a/an foreign entity A) domestic; integrated B) self-sustaining; domestic C) integrated; self-sustaining D) self-sustaining; integrated Answer: C Topic: Integrated or Self-sustaining Foreign Entities Skill: Conceptual 12) A foreign subsidiary's currency is the currency used in the firm's day-to-day operations A) local D) functional B) integrated C) notational dollar Answer: D Topic: Functional Currency Skill: Recognition 13) The determines accounting policy for U.S firms A) Securities and Exchange Commission (SEC) B) Federal Reserve System (Fed) C) Financial Accounting Standards Board (FASB) D) General Agreement on Tariffs and Trade (GATT) Answer: C Topic: FASB Skill: Recognition 14) The two basic methods for the translation of foreign subsidiary financial statements are the method and the method A) current rate; temporal B) temporal; proper timing C) current rate; future rate D) none of the above Answer: A Topic: Current Rate and Temporal Methods Skill: Recognition 15) Exchange rate imbalances that are passed through the balance sheet affect a firm's reported income, but imbalances transferred to the income statement not Answer: FALSE Topic: Temporal vs Current Rate Method Skill: Recognition 16) Which of the following is NOT an economic indicator used by FASB for determining a subsidiary's functional currency? A) cash flow indicators B) sales price indicators C) expense indicators D) These are all economic indicators used by FASB Answer: D Topic: FASB Skill: Recognition 17) The current rate method is the most prevalent method today for the translation of financial statements Answer: TRUE Topic: Current Rate Skill: Recognition 18) The temporal rate method is the most prevalent method today for the translation of financial statements Answer: FALSE Topic: Temporal Method Skill: Recognition 19) Gains or losses caused by translation adjustments when using the current rate method are reported separately on the A) consolidated statement of cash flow B) consolidated income statement C) consolidated balance sheet D) none of the above Answer: C Topic: Current Rate Method Skill: Recognition 20) The biggest advantage of the current rate method of reporting translation adjustments is the fact that the gain or loss goes directly to the reserve account on the consolidated balance sheet and does not pass through the consolidated income statement Answer: TRUE Topic: Current Rate Method Skill: Recognition 21) Under the current rate method, specific assets and liabilities are translated at exchange rates consistent with the timing of the item's creation Answer: FALSE Topic: Temporal Method Skill: Recognition 22) Under the temporal rate method, specific assets and liabilities are translated at exchange rates consistent with the timing of the item's creation Answer: TRUE Topic: Temporal Method Skill: Recognition 23) The basic advantage of the method of foreign currency translation is that foreign nonmonetary assets are carried at their original cost in the parent's consolidated statement while the most important advantage of the method is that the gain or loss from translation does not pass through the income statement A) monetary; current rate B) temporal; current rate C) temporal; monetary D) current rate; temporal Answer: D Topic: Temporal and Current Rate Methods Skill: Conceptual 24) The current rate method of foreign currency translation gains or losses resulting from remeasurement are carried directly to current consolidated income and thus introduces volatility to consolidated earnings Answer: FALSE Topic: Temporal Method Skill: Recognition 25) The temporal method of foreign currency translation gains or losses resulting from remeasurement are carried directly to current consolidated income and thus introduces volatility to consolidated earnings Answer: TRUE Topic: Temporal Method Skill: Recognition 26) Under the U.S method of translation procedures, if the financial statements of the foreign subsidiary of a U.S company are maintained in U.S dollars, A) translation is accomplished through the current rate method B) translation is accomplished through the temporal method C) translation is not required D) the translation method to be used is not obvious Answer: C Topic: Translation Procedures Skill: Conceptual 27) Under the U.S method of translation procedures, if the financial statements of the foreign subsidiary of a U.S company are maintained in the local currency, and the local currency is the functional currency, then A) the translation method to be used is not obvious B) translation is accomplished through the temporal method C) translation is not required D) translation is accomplished through the current rate method Answer: D Topic: Current Rate Method Skill: Conceptual 28) Under the U.S method of translation procedures, if the financial statements of the foreign subsidiary of a U.S company are maintained in the local currency, and the U.S dollar is the functional currency, then A) translation is not required B) translation is accomplished through the current rate method C) translation is accomplished through the temporal method D) none of the above Answer: C Topic: Temporal Method Skill: Conceptual 29) A major problem for international foreign currency transaction is that FASB and the International Accounting Standards Committee (IASC) NOT use the same basic translation procedure Answer: FALSE Topic: FASB vs IASC Skill: Recognition 30) The main technique to minimize translation exposure is called a/an hedge A) balance sheet B) income statement C) forward D) translation Answer: A Topic: Balance Sheet Hedge Skill: Recognition 31) A balance sheet hedge requires that the amount of exposed foreign currency assets and liabilities A) have a 2:1 ratio of assets to liabilities B) have a 2:1 ratio of liabilities to assets C) have a 2:1 ratio of liabilities to equity D) be equal Answer: D Topic: Balance Sheet Hedge Skill: Conceptual 32) If a firm's balance sheet has an equal amount of exposed foreign currency assets and liabilities and the firm translates by the temporal method, then A) the net exposed position is called monetary balance B) the change is value of liabilities and assets due to a change in exchange rates will be of equal but opposite direction C) both B and C are true D) none of the above Answer: C Topic: Balance Sheet Hedge Skill: Conceptual 33) If a firm's subsidiary is using the local currency as the functional currency, which of the following is NOT a circumstance that could justify the use of a balance sheet hedge? A) The foreign subsidiary is about to be liquidated, so that the value of its Cumulative Translation Adjustment (CTA) would be realized B) The firm has debt covenants or bank agreements that state the firm's debt/equity ratio will be maintained within specific limits C) The foreign subsidiary is operating is a hyperinflationary environment D) All of the above are appropriate reasons to use a balance sheet hedge Answer: D Topic: Balance Sheet Hedge Skill: Conceptual 34) If the parent firm and all subsidiaries denominate all exposed assets and liabilities in the parent's reporting currency this will exposure but each subsidiary would have exposure A) maximize translation; no transaction B) eliminate translation; transaction C) maximize transaction; no translation D) eliminate transaction; translation Answer: B Topic: Translation and Transaction Exposure Skill: Conceptual 35) A Canadian subsidiary of a U.S parent firm is instructed to bill an export to the parent in U.S dollars The Canadian subsidiary records the accounts receivable in Canadian dollars and notes a profit on the sale of goods Later, when the U.S parent pays the subsidiary the contracted U.S dollar amount, the Canadian dollar has appreciated 10% against the U.S dollar In this example, the Canadian subsidiary will record a A) 10% foreign exchange loss on the U.S dollar accounts receivable B) 10% foreign exchange gain on the U.S dollar accounts receivable C) since the Canadian firm is a U.S subsidiary neither a gain nor loss will be recorded D) any gain or loss will be recoded only by the parent firm Topic: Translation Loss Skill: Conceptual Answer: A 36) It is possible that efforts to decrease translation exposure may result in an increase in transaction exposure Answer: TRUE Topic: Translation vs Transaction Exposure Skill: Conceptual 37) gains and losses are "realized" whereas gains and losses are only "paper." A) Translation; transaction B) Transaction; translation C) Translation; operating D) None of the above Answer: B Topic: Translation vs Transaction Exposure Skill: Recognition 38) The dominant currency used by a subsidiary in its day-to-day operations is known as its currency A) operational B) transactional C) functional D) foreign Answer: C Topic: Functional Currency Skill: Recognition 39) Translation gains and losses can be quite different from operating gains and losses A) in magnitude only magnitude nor sign B) in sign only D) in both magnitude and sign C) in neither Answer: D Topic: Translation vs Operational Gains and Losses Skill: Recognition 40) A balance sheet hedge is the main technique for managing A) transaction Answer: C B) operating C) translation D) money market Topic: Balance Sheet Hedge Skill: Recognition 41) Management can easily offset both translation and transaction exposure through A) a passive hedging strategy B) an active hedging strategy C) either an active or passive hedging strategy D) It is almost impossible to offset both translation and transaction exposure simultaneously Answer: D Topic: Hedging Skill: Recognition 42) U.S multinational firms must use as their functional currency A) the currency of the primary economic environment where they operate B) the U.S dollar C) the local currency D) the euro Answer: A Topic: Functional Currency Skill: Recognition 43) If the European subsidiary of a U.S firm has net exposed assets of euro 500,000, and the euro drops in value from $1.40/euro to $1.30/euro the U.S firm has a translation A) gain of $50,000 B) loss of $50,000 C) gain of $450,000 D) loss of euro 450,000 Answer: B Topic: Translation Loss Skill: Analytical 44) If the European subsidiary of a U.S firm has net exposed assets of euro 500,000, and the euro increases in value from $1.30/euro to $1.35/euro the U.S firm has a translation A) gain of $25,000 B) loss of $25,000 C) gain of $525,000 D) loss of euro 525,000 Answer: A Topic: Translation Gain Skill: Analytical 45) Under the current rate method, translation gains of losses are reported in an equity reserve account called A) reserve for accounting losses B) accounting reserve adjustment account C) cumulative translation adjustment account D) none of the above; translation gains and losses flow through into the income statement Answer: C Topic: Cumulative Translation Adjustment Account Skill: Recognition 46) Under the current rate method, when management anticipates appreciation of a foreign currency it A) may move funds from cash to savings B) may move funds from cash into plant and equipment C) may try to decrease net exposed assets in that country D) may try to increase net exposed assets in that country Topic: Current Rate Method Skill: Conceptual Answer: D 47) If the British subsidiary of a European firm has net exposed assets of £250,000, and the pound increases in value from euro 1.40/£ to euro 1.45/£, the European firm has a translation A) gain of euro 25,000 gain of £25,000 B) loss of euro 25,000 D) loss of £25,000 C) Answer: B Topic: Translation Loss Skill: Analytical 48) If the British subsidiary of a European firm has net exposed assets of £250,000, and the pound drops in value from euro 1.40/£ to euro 1.30/£, the European firm has a translation A) gain of euro 12,500 C) loss of £12,500 B) loss of euro 12,500 D) gain of £12,500 Answer: A Topic: Translation Gain Skill: Analytical 49) As required by FASB-52, which exchange rate is required to be used to translate assets and liabilities of a foreign entity from its functional currency to the reporting currency? A) forward B) current C) historical D) The exchange rate to be used varies with the situation Answer: B Topic: FASB-52 Skill: Recognition 50) Gains from forward contracts to hedge translation exposure are taxable whereas losses from hedging translation exposure are not Answer: TRUE Topic: Taxable Gains and Losses Skill: Recognition 51) Gains from forward contracts to hedge translation exposure are not taxable whereas losses from hedging translation exposure are Answer: FALSE Topic: Taxable Gains and Losses Skill: Recognition 52) Multinational enterprises always completely hedge translation exposure Answer: FALSE Topic: MNE Hedging Practices Skill: Conceptual 53) When using FASB-52, translated gains and losses due to changes in foreign currency values are usually reported as A) gains (losses) due to foreign exchange B) net income (loss) C) stockholder equity Answer: C D) none of the above Topic: FASB-52 Skill: Recognition 54) Which of the following firms would NOT bear risk caused by translation exposure? A) A U.S based manufacturing firm with a fully owned subsidiary that generates earnings in Japan The subsidiary always keeps and reinvests the earnings B) A U.S based retailer with a fully owned subsidiary in Canada that generates losses in Canada that the parent firm occasionally covers C) A U.S based firm with a subsidiary in Britain that occasionally remits earnings to the parent firm D) All of the above are subject to translation exposure Answer: D Topic: Translation Exposure Skill: Conceptual 55) If a European subsidiary of a U.S firm has net exposed liabilities of euro 500,000, and the euro drops in value from $1.40/euro to $1.30/euro then the U.S firm has a translation A) gain of $50,000 B) loss of $50,000 D) loss of euro 450,000 C) gain of $450,000 Answer: A Topic: Translation Gain Skill: Analytical 56) If a European subsidiary of a U.S firm has net exposed liabilities of euro 500,000, and the euro increases in value from $1.30/euro to $1.35/euro then the U.S firm has a translation A) gain of $25,000 B) loss of $25,000 C) gain of $525,000 D) loss of euro 525,000 Topic: Translation Loss Skill: Analytical Answer: B ... income and expense items B) equity accounts and fixed assets; current assets and liabilities C) current assets and liabilities; equity accounts and fixed assets D) equity accounts and current liabilities;... integrated foreign entity C) foreign D) none of the above Answer: B Topic: Integrated Foreign Entity Skill: Recognition 11) Consider two different foreign subsidiaries of Georgia-Pacific Wood Products... depreciation; the market for foreign exchange swaps C) current income; equity reserves D) current liabilities; equity reserves Answer: C Topic: Accounting for Translation Error Skill: Conceptual