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Q:
Which of the following statements is true about the class system in the United States when compared to the British class system?
A. The class system in the United States is more pronounced than in Britain.
B. In the United States, upward social mobility cannot normally be achieved in one generation.
C. Class membership in the United States is mainly determined by an individual's background and schooling.
D. In American society, the extreme emphasis on individualism increase the impact of class background on business operations.
E. Successful individuals from humble origins are highly respected in American society.
Q:
A _____ system is a form of open stratification in which the position a person has by birth can be changed through his or her own achievements or luck.
A. class
B. caste
C. rank
D. grade
E. merit
Q:
In a country called Burnada, the citizens are restricted from moving out of the strata they are born into. Also, individuals are allowed to engage only in the occupation associated with their particular strata. The system of social stratification being practiced in Burnada can be identified as a:
A. cluster system.
B. caste system.
C. merit-based system.
D. class system.
E. bureaucracy-based system.
Q:
Although the number of societies with caste systems diminished rapidly during the twentieth century, one partial example still remains in:
A. Japan.
B. the United States.
C. India.
D. Britain.
E. Germany.
Q:
Mountland Republic follows a system of social stratification that allows for flexibility in terms of social mobility. In this system of open stratification the status of a person is solely determined by his or her own socioeconomic achievements. Mountland Republic is most likely to be following a _____ system of social stratification.
A. caste
B. class
C. religious
D. grade
E. bureaucratic
Q:
A _____ system is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime.
A. caste
B. merit
C. class
D. economic
E. bureaucratic
Q:
Which of the following statements is true about social stratification?
A. The most rigid system of social stratification is a class system.
B. Individuals are born into a particular social stratum.
C. It is not possible for people to move between social strata.
D. Britain is an example of a society where the caste system is predominant even today.
E. Individuals born into a stratum toward the bottom of the social hierarchy tend to have better life chances.
Q:
(p. 99) _____ are defined as hierarchical social categories, often based on family background, occupation, and income.
A. Social modes
B. Social empires
C. Social strata
D. Social councils
E. Social clusters
Q:
Which of the following is a possible downside of emphasizing the primacy of group identification over individualism?
A. It encourages managerial mobility between companies.
B. It leads to a lack of dynamism and entrepreneurship.
C. It hampers team building and cooperation.
D. It raises the costs of doing business due to its adverse impact on managerial stability.
E. It leads to the lack of company-specific skills and a network of contacts among managers.
Q:
If a society emphasizes the group as the primary unit of social organization, it is most likely to:
A. encourage competition between the members of the group.
B. expose managers to different ways of doing business.
C. foster dynamism and entrepreneurship.
D. discourage employees from moving from company to company.
E. fail to facilitate self-managing work teams.
Q:
The U.S. government's attitude toward transfer pricing on subsidiary transactions in foreign locations is:
A. uninterested, because these transactions are outside the United States and, thus, beyond U.S. jurisdiction.
B. interested, because transfer pricing has tax implications for the host governments hence the IRS guidelines.
C. neither interested nor uninterested, because, although there are tax implications for the host country, the U.S. tax authorities feel comfortable exercising their authority globally.
D. uninterested, because foreign taxes are of no interest to them.
Q:
When compared to the American society, the Japanese society lacks:
A. commitment to lifetime employment.
B. emphasis on group memberships.
C. self-managing work teams.
D. close cooperation between individuals.
E. dynamism and entrepreneurship.
Q:
A fronting loan enables the firm to:
A. protect itself from the risk of blocked asset transfers, such as remittances, loan payments, and profit repatriations.
B. build collateral with local firms.
C. devote more resources to bricks and mortar.
D. gain a competitive advantage in new markets.
Q:
Which of the following statements is true about the business implications of the Japanese society?
A. In Japan, the social status of an individual is determined independent of the standing of the group to which he or she belongs.
B. It is difficult to find self-managing work teams within Japanese organizations.
C. Japan is more successful at pioneering radically new products and new ways of doing business than the United States.
D. There is a low degree of movement from company to company among managers and workers in Japan.
E. In Japan, the managers and workers lack company-specific knowledge, experience, and a network of interpersonal business contacts.
Q:
Transfer pricing may serve as a vehicle for:
A. moving blocked goods from one country to another.
B. moving profits and blocked royalties from high-tax to low-tax subsidiaries.
C. manager motivation.
D. A, B, and C.
Q:
One of the downsides to the emphasis on individualism is that it:
A. is difficult to build teams within an organization to perform collective tasks.
B. does not support entrepreneurship and innovation.
C. discourages managerial mobility.
D. fails to foster general managerial skills required to find solutions to current problems.
E. discourages competition among employees within a company.
Q:
The cash flow management of a global firm, compared to that of a domestic firm, is:
A. exactly the same: moving money is moving money.
B. less complex, because the sums are larger and the process is centralized.
C. more complex, because currencies vary, as do national-level regulations.
D. more complex, because the number of subsidiaries or branches is larger.
Q:
These countries prefer debt to equity by large margins:
A. France, Italy, and Japan.
B. United Kingdom, Italy, and United States.
C. United States, Canada, and United Kingdom.
D. Japan, United States, and United Kingdom.
Q:
The United Republic emphasizes individual performance and achievements in every sphere of society. Which of the following statements is true about the society of this country?
A. The country suffers from a low degree of dynamism and innovation.
B. The country has a low degree of managerial mobility.
C. There is a low degree of entrepreneurial activity in the country.
D. The employees in this country will lack loyalty and commitment to a company.
E. Managers in such a country have highly developed company-specific skills but they lack general skills.
Q:
Offshore financial centers are appealing to the international firm because they:
A. outsource all of the administrative details.
B. are in Switzerland, the Cayman Islands, the Bahamas.
C. offer reduced regulations and lower taxes than in the home country.
D. have lower labor costs.
Q:
In many Western societies, the _____ is the basic building block of social organization.
A. family
B. community
C. work group
D. individual
E. social group
Q:
Companies in the United States, Canada, and the United Kingdom tend to:
A. rely on equity more than do companies in most other countries.
B. depend on debt more than do companies in other countries.
C. divide their equity and debt almost evenly.
D. rely on retained earnings more than do companies in most other countries.
Q:
In the context of social structure, the American society is characterized by a low degree of:
A. social stratification.
B. mobility between strata.
C. entrepreneurial activity.
D. managerial mobility.
E. dynamism and innovation.
Q:
Compared to equity financing, debt financing is thought to be:
A. less expensive, because interest on the debt is usually tax deductible.
B. more expensive, because interest rates are beyond the control of the company.
C. more expensive, because debt markets are professionally run and mostly institutional.
D. less expensive, because the debt is usually aggregated.
Q:
Which of the following is an implication of high degree of managerial mobility in societies that emphasize individualism?
A. Reduced costs of doing business
B. Increased managerial loyalty and commitment to an individual company
C. Lack of company-specific experience, knowledge, and a network of contacts among managers
D. Lack of exposure among employees to different ways of doing business
E. Inability to apply good practices and techniques developed in one firm to other firms
Q:
In debt markets, the corporate trend is to:
A. raise debt-based capital in the home country first.
B. raise debt capital in the local markets first.
C. raise equity capital first.
D. rely first on retained earnings before debt is incurred.
Q:
Which of the following is a dimension of social structure that is particularly important when explaining differences between cultures?
A. The average income of the people who belong to a particular culture
B. The dominant race and the gender in the society
C. The extent to which work is viewed as more important than family
D. The degree to which the society is stratified into classes or castes
E. The degree to which a society supports multiple subcultures
Q:
ADRs are a way for non-U.S. firms to:
A. participate in U.S. debt markets.
B. lock in dollar exchange rates.
C. leverage in a foreign currency.
D. participate in local U.S. equity markets without incurring the need for a broker or foreign exchange.
Q:
Which of the following statements is true about most Western societies?
A. In Western societies social groups, rather than individuals, are the basic building blocks of social organization.
B. The value systems of many Western societies emphasize individual achievement.
C. In Western societies, the social standing of individuals is merely a function of who they work for.
D. The emphasis on individuals in Western societies has led to low level of entrepreneurial activity.
E. It is easier to build and manage teams within organizations in Western societies.
Q:
Indictments against theft, incest, and cannibalism are examples of how violating _____ can bring about serious retribution.
A. social structures
B. mores
C. folkways
D. etiquettes
E. doctrines
Q:
The capital structure of the firm can be raised externally through:
A. leveraging and bonds.
B. debt and equity.
C. debt and retained earnings.
D. retained earnings and bonds.
Q:
Mores are best defined as:
A. fundamental duties to be followed in a society.
B. a set of greeting customs to be followed in different social contexts.
C. abstract ideas regarding one's personal conduct in a business setting.
D. norms that are seen as central to the functioning of a society and to its social life.
E. actions that are considered as taboos in a society.
Q:
Opportunities for corporations to tap into varying international markets exist because:
A. markets, although interconnected, are not fully integrated.
B. some regional markets favor certain business sectors (Mexico, cement; U.S., fast food; EU, cheese).
C. national markets favor domestic companies.
D. B and C.
Q:
Which of the following statements is true of mores?
A. Mores are actions of little moral significance.
B. Violation of mores is generally not a serious matter.
C. Social conventions regarding eating with the correct utensils is a good example of mores.
D. Mores do not differ among cultures.
E. Certain mores have been enacted into law.
Q:
A difference in the attitudes of people toward time in different cultures is an example of the _____ in individual cultures.
A. folkways
B. religious doctrines
C. mores
D. laws
E. social structures
Q:
The process of transferring value across borders is complex because it involves:
A. currency exchange rates.
B. restrictions on the movement of funds.
C. differing tax systems.
D. A, B, and C.
Q:
Which of the following best exemplifies violation of mores?
A. Attending a business meeting in casual clothes
B. Committing a financial fraud
C. Failing to greet a person you know
D. Eating with the inappropriate cutlery in a social gathering
E. Keeping a good friend waiting at a coffee shop
Q:
The major argument against 3BL is that:
A. companies don't want the public to know what they are doing.
B. social and environmental impacts cannot be measured as well as can economic results.
C. measurement won't get us closer to the desired state.
D. A and B.
Q:
3BL gives companies the chance to measure and make public the social and environmental effects of their decisions: they should welcome this, in part because:
A. what we tend to learn about companies is what is reported in the media, and that reporting tends to be focused on problems.
B. it's about time companies are held accountable for their actions.
C. right now we measure company decision results only at the economic level.
D. A and C.
Q:
What is the difference between folkways and mores?
A. Folkways are norms that are seen as central to the functioning of a society whereas mores are the routine conventions of everyday life.
B. Violating mores tends to bring more serious retribution than violating folkways.
C. Folkways exclude rituals and symbolic behaviors included in mores.
D. Folkways have much greater significance than mores.
E. Mores cannot be enacted into laws, whereas folkways can.
Q:
Elkington suggests that the drivers for triple-bottom-line accounting can be:
A. corporate profits and growth.
B. markets, values, transparency, life-cycle technology, partnerships, time, and corporate governance.
C. CSR.
D. the SEC.
Q:
Which of the following best exemplifies violation of folkways?
A. Committing a financial fraud
B. Practicing cannibalism under the belief that it leads to superpowers
C. Failing to greet a person you know
D. Stealing an author's or an inventor's intellectual property
E. Murdering a business partner
Q:
In his book Cannibals with Forks, John Elkington puts forward the argument that:
A. capitalism can become civilized.
B. capitalism is not, by its very nature, uncivilized and destructive of natural resources.
C. natural resources are a God-given gift for mankind to use.
D. developing nations will become more competitive with Western nations.
Q:
_____ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like.
A. Folkways
B. Proscriptions
C. Reprobations
D. Fellowships
E. Taboos
Q:
Once convergence is reached:
A. financial markets will be more integrated than they are now.
B. direct comparisons of company statements will be possible.
C. A and B.
D. Western-style capitalism will be at its apex.
Q:
In a society, actions of people directed toward one another are governed by a set of social rules called:
A. norms.
B. manifestoes.
C. structures.
D. scriptures.
E. dialects.
Q:
One of the major differences between GAAP and the IFRS is that:
A. IFRS relies more on norms than does GAAP, which relies on expedience for compliance.
B. IFRS is more lax than is GAAP.
C. IFRS relies on principles, whereas GAAP is rules-based.
D. A and C.
Q:
In a social context, the term values is used to describe the:
A. economic benefits that are inherent to a culture.
B. collective wealth of the society.
C. abstract ideas about what a group believes to be good, right, and desirable.
D. political ascendancy of a country.
E. social rules and guidelines about the appropriate behavior in public.
Q:
Which of the following statements is true about culture?
A. Culture is static as it does not evolve.
B. Multinational enterprises can themselves be engines of cultural change.
C. The cost of doing business in a country or region is always independent of its culture.
D. It is not possible for a country to support multiple cultures.
E. The values and norms of a culture emerge fully formed.
Q:
The United States is moving toward convergence with IASB standards:
A. and is the only major economy that does not follow them now.
B. and expects to be harmonized by 2015.
C. although the goal is long term, over 50 years.
D. A and B.
Q:
When Shop Smart opened its first super market in China it was unable to generate any sales. After conducting a research, it was understood that the local sales personnel found it difficult to communicate with the American store managers. In addition, Chinese consumers found it difficult to shop in the American way. Shop Smart's failure in China can be attributed to the lack of:
A. cross-cultural literacy.
B. class consciousness.
C. a first-mover advantage.
D. Confucian dynamism.
E. ethnocentrism.
Q:
The U.S. body that establishes accounting standards, the FASB, is:
A. a branch of the U.S. government.
B. elected by seat holders on the NYSE.
C. appointed by the chair of the U.S. House of Representatives Banking Committee.
D. a private organization.
Q:
When a firm offers its stock in a foreign market, it is:
A. encountering foreign currency exposure.
B. trying to limit its investor pool.
C. violating domestic law in the EU or United States.
D. cross-listing.
Q:
_____ means an understanding of how cultural differences across and within nations can affect the way business is practiced.
A. Ethnocentrism
B. Cross-cultural literacy
C. Pan-culture integration
D. Cultural lag
E. Cultural capitalism
Q:
According to the World Values Survey, as countries get richer, a shift occurs away from traditional values linked to religion, family, and country, and toward secular rational values.
Q:
The Anglo-American inclination toward optimism is explained by a desire to:
A. promote good feelings within the firm.
B. show impressive earnings that will attract investors.
C. promote capitalism.
D. contribute to political stability.
Q:
People who cannot take food or safety for granted tend to have authoritarian tendencies, and believe that men make better political leaders than women.
Q:
In their measurement and disclosure for accounting systems, less developed countries tend toward:
A. transparency and conservatism.
B. transparency and optimism.
C. secrecy and optimism.
D. secrecy and conservatism.
Q:
According to Geert Hofstede, high power distance cultures were found in societies that tried to play down inequalities of power and wealth as much as possible.
Q:
The functional currency of a foreign operation is:
A. the currency of the parent company.
B. the currency of the host country.
C. whichever currency the company chooses to declare as the functional currency.
D. the currency in which cash flows, pricing, expenses, and financing are denominated.
Q:
The use of a grading system in schools teaches children the value of personal achievement and competition.
Q:
In the temporal method, fixed assets such as real estate are translated at:
A. their market value.
B. their historic cost.
C. their assessed value.
D. an average of the period's rates.
Q:
In the current rate method, assets and liabilities are translated:
A. at their historical rates.
B. at an average of the historical and current rates.
C. on the date the balance sheet is produced.
D. however the company chooses, as long as it is consistent in all its foreign operations.
Q:
Language is one of the defining characteristics of a culture.
Q:
Confucianism is not concerned with the supernatural and has little to say about the concept of a supreme being or an afterlife.
Q:
A foreign currency sale is recorded as revenue, using the exchange rate:
A. on the date of the sale.
B. on the date the balance sheet is consolidated to financial reports.
C. on a historical average over the period between the sale and the consolidation.
D. that the company decides to use.
Q:
(p. 110) Buddhism supports the caste system.
Q:
There are two points at which operating in a foreign currency raises issues for accounting:
A. when debt is incurred and when foreign payrolls are run.
B. when transactions are made in foreign currencies and when foreign subsidiaries consolidate their results back to corporate financial reports.
C. when the currency fluctuates and when the local inflation rate changes.
D. when the interest and inflation rates change.
Q:
Buddhism was founded in China.
Q:
Assumptions that underlie a country's legal, political, and economic systems:
A. do not influence accounting because it is a quantified discipline, objective and factual.
B. influence accounting, both its practice and the commonly shared understanding of its purpose.
C. influence accountants but not the science of accounting.
D. do not influence accounting because value is measured in currency, an objective and comparable measure.
Q:
Income tax is a direct tax levied on earnings, and:
A. VAT is also a direct tax.
B. VAT is not a tax, in the legal sense.
C. VAT, vertical added tax, is indirect.
D. VAT is an indirect tax.
Q:
The concept of mobility between castes within an individuals lifetime makes no sense to traditional Hindus.
Q:
Many corporations do not hedge translation exposure.
Q:
Max Weber argued that the ascetic principles embedded in Hinduism encourage the kind of entrepreneurial activity in pursuit of wealth creation that we find in Protestantism.
Q:
The murabaha contract is the most widely used among the worlds Islamic banks, primarily because it is the easiest to implement.
Q:
Translation exposure occurs when the subsidiary's results are consolidated at the corporate level.
Q:
Under the Islamic banking method of mudarabah, when an Islamic bank lends money to a business, rather than charging that business interest on the loan, it takes a share in the profits that are derived from the investment.
Q:
Swap contracts exchange foreign currency debt for another liability in the home currency.
Q:
Islam is not just a religion; it is also the source of law, a guide to statecraft, and an arbiter of social behavior.
Q:
In a money market hedge, the firm matches the balance sheet asset with a liability in the same currency.