Question : 90. Listed below nine global business terms introduced in this chapter: Each : 1229474

90. Listed below are nine global business terms introduced in this chapter:
  
Each of the following statements may (or may not) describe one of these terms. In the space provided below each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms.
a. The strategy of creating offsetting positions so that losses from currency fluctuations will be offset by gains resulting from the same fluctuations.______________________________
b. Selling a good or service to a foreign customer.______________________________
c. Government allocates resources and determines output through central planning.______________________________
d. The organization responsible for developing uniform worldwide accounting standards.______________________________
e. Distinguishes between illegal influence peddling and legal facilitating payments.______________________________
f. A cross-border contractual agreement allowing one company to use trademarks, patents, or technology of another company.______________________________
g. The impact on the value of a company of unexpected fluctuations in the exchange rate.______________________________

Multiple Choice Questions
 

91. Which of the following statements are true about globalization methods? 
A. International licensing involves the creation of a new company that is owned by two or more firms from different countries.
B. Exporting involves contracts that allow a foreign company to use a domestic company’s trademarks, patents, processes, or technology.
C. Global sourcing involves the close coordination of research and development, purchasing, marketing, and manufacturing across national boundaries.
D. A wholly owned international subsidiary is created when a foreign government owns 100% of the equity in a U.S. based firm.

92. Which of the following environmental factors does not impact the cost of doing business in a foreign country? 
A. Sales and Use taxes in the United States.
B. Laws regulating the transfer of profits out of a country.
C. Tax and tariff regulations.
D. Restricted access to communication and transportation networks.

93. A country whose citizens are highly group-oriented and who accept unequal power distributions between and within organizations would be considered: 
A. Individualistic and lower power distance.
B. Collectivist and high power distance.
C. Individualistic and high power distance.
D. Collectivist and low power distance.

94. On March 1, Laton Products (a U.S. firm) purchased manufacturing inputs from a Mexican supplier for 20,000 pesos, payable on June 1. The exchange rate for pesos on March 1 was $0.17. If the exchange rate increases to $0.19 on June 1, what amount of gain or loss would be reported by Laton related to the currency exchange? 
A. $400 gain.
B. $200 loss.
C. $400 loss.
D. $200 gain.

95. On January 1, a German company purchased merchandise from a U.S. firm for $50,000, payable on March 1. The exchange rate for euros on January 1 was $0.70. If the exchange rate increases to $0.72 on March 1, what amount of gain or loss would the U.S. firm report related to currency fluctuation? 
A. $1,000 gain.
B. $1,000 loss.
C. $500 gain.
D. No gain or loss would be reported.