Choose the best answer for each of the following questions.

1			International Accounting Standards are:
			A)	Issued by the IASB
			B)	Binding on members of the International Monetary Fund
			C)	Adopted by the IOSCO
			D)	Adopted by the FASB
2			A U.S. multinational enterprise realizes a foreign currency transaction gain on a purchase from a foreign supplier denominated in the foreign currency if, between the dates of purchase and payment, the:
			A)	Selling spot rate for the foreign currency increases
			B)	Buying spot rate for the foreign currency increases
			C)	Selling spot rate for the foreign currency decreases
			D)	Buying spot rate for the foreign currency decreases
3			IAS 21, "Accounting for the Effects of Changes in Foreign Exchange Rates," does not address forward contracts:
			A)	Not designated as a hedge
			B)	Designated as a hedge of a firm commitment
			C)	Designated as a hedge of a net investment
			D)	Of any type
4			On July 1, 2002, Occidental Corporation purchased merchandise on 30-day open account from a New Zealand supplier at an invoice cost of 100,000 New Zealand dollars (NZ$). On that date, spot exchange rates were: buying—NZ$1 = $0.777; selling—NZ$1 = $0.7785. On July 31, 2002, Occidental acquired a draft for NZ$100,000 for $77,600. In the journal entry to record the acquisition of the NZ$100,00 draft, Occidental recognizes a foreign currency:
			A)	Transaction loss of $100
			B)	Transaction loss of $250
			C)	Transaction gain of $250
			D)	Transaction gain of $23,400
5			Watt Company, a U.S. multinational enterprise, purchased goods from Kluger Company of Germany on March 1, 2002, for 30,000 euros (C) when the selling spot rate was C1 = $1.0895. Watt's fiscal year-end was March 31, 2002, when the selling spot rate was C1 = $1.0845. Watt acquired C30,000 and paid the invoice on April 20, 2002, when the selling spot rate was C1 = $1.0945. What amounts are displayed in Watt's income statements as foreign currency transaction gains or losses for the years ended March 31, 2002, and 2003?     2002 2003 a. $0 $0 b. $0 $150 loss c. $150 loss $0 d. $150 gain $300 loss
			A)	Choice A
			B)	Choice B
			C)	Choice C
			D)	Choice D
6			The International Accounting Standards Board attempts to solicit general acceptance of international accounting standards that it adopts.
			A)	True
			B)	False
7			Spot rates are applicable to current exchanges of one currency for another.
			A)	True
			B)	False
8			A U.S. multinational enterprise pays the foreign currency trader's buying spot rate for a desired amount of foreign currency.
			A)	True
			B)	False
9			If a U.S. multinational enterprise needed HK$250,000 (Hong Kong dollars), and the spot exchange rates were: buying—HK$1 = $0.1725; selling—HK$1 = $0.1728, the U.S. enterprise would pay $43,125 for a draft denominated in HK$250,000.
			A)	True
			B)	False
10			Foreign currency transaction gains and losses result from commercial bargaining between business enterprises in different countries.
			A)	True
			B)	False