Which of the Following Is Not a Problem Caused by Diversity

question 46

Multiple Choice

Which of the following is not a problem caused by diversity in accounting practices across countries?

• A) Comparing companies in the same industry that are headquartered in different countries.
• B) Translating foreign currency balances into U.S. dollars.
• C) Converting local GAAP financial statements into U.S. GAAP for consolidation purposes.
• D) Maintaining separate accounting records in both the local and U.S. GAAP.
• E) Identifying and retaining personnel who are competent to prepare financial statements in both international and domestic accounting standards.

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Definitions:

Retains Earnings

The portion of a company's profits that are kept or withheld from shareholders to reinvest in the business or pay off debt.

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health.

Shareholders

Individuals or entities that own shares in a corporation, entitling them to a portion of its earnings and assets.

Retained Earnings

The portion of a company's profits that is kept or retained within the company instead of being paid out to shareholders as dividends.