Which Statement Is Correct as It Relates to Diverse Accounting

question 39

Multiple Choice

Which statement is correct as it relates to diverse accounting practices across countries?

• A) Gaining access to foreign capital markets is relatively easy and inexpensive once the financial statements are converted to the local currency of the country where the financing is desired.
• B) U.S. GAAP is acceptable worldwide wherever IFRS has not been adopted.
• C) To have stock listed on a U.S. stock exchange, all financial statements submitted to the SEC must be prepared either using U.S. GAAP or using IFRS.
• D) Stock analysts specializing in industry coverage can compare financial statements regardless of various national or international accounting standards used by companies being compared.
• E) Translating financial statements of various currencies into one common currency for consolidation purposes does not resolve the problem of diversity of accounting practices across countries.

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Definitions:

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Simple Rate

Simple rate often refers to the straightforward, non-compounded percentage in various financial calculations, such as interest rates.

Salvage Value

The anticipated market price of an asset at the conclusion of its effective life.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to the production of goods.