If a Company Is a Multinational Company with Operations in Several

question 28

Multiple Choice

If a company is a multinational company with operations in several different countries, one way to achieve comparability of historical-cost based ROIs for facilities in different countries is to:

• A)restate the results of operations using the cash basis method of accounting
• B)use GAAP for all reporting and calculations
• C)restate the results of all operations in dollars
• D)All of these answers are correct.

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Definitions:

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for global use.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased first are sold first.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.