ABC Corp. owned a subsidiary in France. ABC concluded that thesubsidiary's functional currency was the U.S. dollar. Which one of thefollowing statements would justify this conclusion?
a.Most of the subsidiary's sales and purchases were with companies in theU.S.
b.ABC's other subsidiaries all had the dollar as their functional currency.
c.ABC is located in the U.S.
ABC Corp. owned a subsidiary in France. ABC concluded that thesubsidiary's functional currency was the U.S. dollar. What must ABC do to readythe subsidiary's financial statements for consolidation?
a.First translate them, then remeasure them.
d.First remeasure them, then translate them.
When consolidating a foreign subsidiary, which of the followingstatements is true?
c.Subsidiary's income/loss is carried forward to the consolidated balance sheet.
d.Subsidiary's cumulative translation adjustment is carried forward to theconsolidated balance sheet.
e.Parent reports a cumulative translation adjustment from adjusting itsinvestment account under the equity method.
When preparing a consolidating statement of cash flows, which ofthe following statements is false?
b.All items follow translation rates used for the balance sheet and the incomestatement.
c.A change in accounts receivable is translated using the current rate.
d.All operating activity items are translated at an average exchange rate for theperiod.
e.Dividends paid are translated using the historical rate at the date of thepayment.
When preparing a consolidation worksheet for a parent and itsforeign subsidiary accounted for under the equity method, which of thefollowing statements is false?
b.The amount of equity income recognized by the parent in the current year iseliminated .
c.The subsidiary's stockholders' equity accounts as of the beginning of the yearare eliminated.
d.The allocations of excess of fair value over book value at the date ofacquisition are eliminated.
The translation adjustment from translating (current method) aforeign subsidiary's financial statements should be shown as
b.an asset or liability (depending on the balance) in the consolidated balancesheet.
c.a component of stockholders' equity in the consolidated balance sheet.
d.a revenue or expense (depending on the balance) in the consolidated incomestatement.
e.an element of the notes which accompany the consolidated financial statements.
The prospectus part of a registration contains all except which ofthe following?
a.A description of the risks associated with the securities.
b.A description of the business and the properties owned by the company.
c.Additional data concerning expenses of issuance.
d.Financial statements for the issuing company audited by an independent CPAalong with appropriate supplementary data.
Information required in proxy statements includes all except whichof the following?
a.Market price of the company's common stock for each quarterly period within thetwo most recent fiscal years.
b.Listing of company directors and executive officers.
c.Description of the business activities including principal products and sourcesand availability of raw materials.
e.Two-year summary of industry segments, export sales, and foreign and domesticoperations.
What is shelf registration?
a.A procedure that allows a company to register securities and then sell themover a period of two years without reregistering.
b.The registration of mutual funds that engage in investing and tradingsecurities.
c.The registration of securities issued in connection with business combinationtransactions.
e.A method of filing Form 10-K with the SEC.
What is private placement of securities?
a.the registration of mutual funds that engage in investing and tradingsecurities.
b.A procedure that allows the sale of securities to a small group ofsophisticated knowledgeable investors, without any general solicitation.
d.A method of filing Form 10-K with the SEC.
e.A sale of securities to 35 or fewer accredited investors.
Audited financial statements in an annual report of an issuer thatis subject to SEC regulation must include:
b.one balance sheet, one income statement, and one statement of cash flows.
c.three balance sheets, three income statements, and three statements of cashflows.
d.two balance sheets, three income statements, and three statements of cashflows.
e.two balance sheets, two income statements, and two statements of cash flows.
What information needs to be included in Form 10-Q? (1) Income statements for the most recent quarter and for theyear to date as well as for the comparative periods in the previous year. (2)Income statements for the most recent quarter and for the year to date as wellas for the comparative periods in the previous two years.
a.2, 3, and 4.
b.1, 3, and 4.
c.2 and 4.
d.1 and 3.
e.1 and 2.
Which statement is false regarding the registration of publicaccounting firms with the PCAOB under the Sarbanes-Oxley Act?
a.Foreign accounting firms are exempt from registration.
b.Disclosure requirements include annual fees received from each issuer for thefirm's audit and nonaudit services.
c.Information regarding disagreements between the issuer and the audit firmduring the previous year must be disclosed.