Financial Accounting Practices and Standards Used in Other Countries

question 20

Multiple Choice

Financial accounting practices and standards used in other countries

• A)are the same as practices used by United States companies.
• B)have different systems of financial accounting.
• C)are more progressive than those used by United States companies.
• D)will often have common practices similar to U.S.GAAP.

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Definitions:

Sales-Type Lease

An arrangement where a lessor sells an asset to a lessee under lease terms, effectively treating the lease as a purchase and sale from an accounting standpoint.

Guaranteed Residual Value

This is the estimated value of an asset at the end of its lease term or useful life, as guaranteed by the lessee or a third party.

Unearned Interest

Interest that has been collected on a loan by the lending institution but not yet earned because the principal amount of the loan has not been fully disbursed.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.