1. Which of the following best describes international financial reporting standards?
a. IFRS describes the generally accepted accounting principles that are currently used by all companies in the United States.
b. IFRS consist only of standards that have been issued since the IASB was formed in 2001.
c. IFRS are considered to be more concept-based than U.S. GAAP.
d. IFRS will be required to be used in the United States beginning in 2014.

2. Which of the following statements is true?
a. The FASB has consistently resisted the adoption of IFRS in the United States for fear that it will lose its standard-setting authority.
b. The requirement to use IFRS by the European Union led to a significant increase in the global acceptance of IFRS.
c. IFRS has existed for nearly as long as U.S. GAAP; however, it only recently began to gain acceptance as a body of high-quality accounting standards.
d. The SEC is considering allowing foreign companies who trade stock on the U.S. stock exchanges to use IFRS.

3. Convergence of U.S. GAAP and IFRS is best described as:
a. The replacement of U.S. GAAP by IFRS.
b. The replacement of IFRS by U.S. GAAP.
c. Changing existing U.S. GAAP so that any differences in IFRS will be insignificant.
d. Changing both existing U.S. GAAP and IFRS to reduce differences and developing new GAAP through a joint standard-setting process.

4. Which of the following organizations has the responsibility to create IFRS?
a. Financial Accounting Standards Board
b. International Accounting Standards Committee
c. International Accounting Standards Board
d. Securities and Exchange Commission

5. Which of the following is not an advantage of IFRS?
a. The use of IFRS should increase the comparability and transparency of financial information.
b. The use of IFRS will make it easier to access foreign capital markets.
c. IFRS requires more judgments than U.S. GAAP.
d. IFRS is less conservative than U.S. GAAP so net income under IFRS will generally be higher than net income under U.S. GAAP.

6. Which of the following is not a disadvantage of IFRS?
a. IFRS will require significantly more training and education than required for U.S. GAAP.
b. The use of IFRS could be viewed as adopting a lower quality standard.
c. Due to cultural differences among countries, it will be difficult to ensure consistent application and interpretation of IFRS.
d. Different versions of IFRS exist that may cause confusion for users of financial statements.

7. With regard to the presentation of financial information under IFRS, which of the following is true?
a. The terminology on the balance sheet and the income statement is the same under IFRS and U.S. GAAP.
b. Under IFRS, the element of the balance sheet are often presented in reverse order relative to U.S. GAAP, with noncurrent assets presented before current assets and stockholders’ equity presented before liabilities.
c. Under IFRS, the elements of the income statement are often presented in reverse order, with expenses presented first followed by revenues.
d. IFRS do not require the presentation of a statement of cash flows.

8. Which of the following inventory costing methods is not allowed under IFRS?
a. FIFO
b. Specific Identification
c. Average Cost
d. LIFO

9. Which of the following is true?
a. IFRS allows property, plant, and equipment to be revalued upward if fair value is higher than historical cost.
b. IFRS contains more extensive guidance on revenue recognition than U.S. GAAP.
c. IFRS has a much more broad definition of cash than U.S. GAAP.
d. The accounting for research and development costs is identical under IFRS and U.S. GAAP.

10. Which of the following is true with regard to contingent liabilities?
a. IFRS and U.S. GAAP use the same terminology to refers to contingent liabilities.
b. A contingent liability is recognized under IFRS when it is more likely than not that the contingent event will occur.
c. Fewer events will be recognized as contingent liabilities under IFRS than under U.S. GAAP.
d. Provisions are contingent liabilities that are not recognized in the financial statements.