You are the senior accountant for an international manufacturing company and the
ID: 2506685 • Letter: Y
Question
You are the senior accountant for an international manufacturing company and they have asked you to do some research on International accounting standards. Which of the following accounting situations is treated virtually identically under both U.S. and International accounting standards?
Answer
earnings per share
Inventory
plant, property and equipment
business combinations
1.
You are the controller of A company that has just recently merged with B company. You are doing some research and based on your old accounting textbooks from 1999 you are thinking about using the pooling method for this transaction. This method
Answer
requires assets only to be recorded at historical costs and liabilities at fair value
requires all assets to be recorded at historical cost
requires all assets and liabilities to be recorded at fair value
is no longer an acceptable method
1.
You are the controller of P company and have been asked to see if this is situation is in the best interest of the company. P company would like to sell bonds to obtain financing. P company owns an 80% interest in S company and interest rates are down. S company is smaller than P company and has a lower credit rating. P company would like to reduce interest costs on S company debt. You have decided
Answer
the intercompany debt would be eliminated when consolidated statements are prepared so this would be a good idea
the intercompany debt would not be eliminated when consolidated statements are prepared therefore showing a high current ratio to the parent
the intercompany debt would not be eliminated when consolidated statements are prepared therefore showing a high current ratio to the subsidiary
a parent can not incur debt for a subsidiary
earnings per share
Inventory
plant, property and equipment
business combinations
Explanation / Answer
You are the senior accountant for an international manufacturing company and they have asked you to do some research on International accounting standards. Which of the following accounting situations is treated virtually identically under both U.S. and International accounting standards?
Answer
Inventory
1.
You are the controller of A company that has just recently merged with B company. You are doing some research and based on your old accounting textbooks from 1999 you are thinking about using the pooling method for this transaction. This method
Answer
is no longer an acceptable method
1.
You are the controller of P company and have been asked to see if this is situation is in the best interest of the company. P company would like to sell bonds to obtain financing. P company owns an 80% interest in S company and interest rates are down. S company is smaller than P company and has a lower credit rating. P company would like to reduce interest costs on S company debt. You have decided
Answer
the intercompany debt would be eliminated when consolidated statements are prepared so this would be a good idea
Inventory
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