Accounting Chapter 15

  1. What is exporting?
    Selling a good or service to a foreign customer
  2. What is international licensing?
    A contractual agreement between a company & foreign party allowing the use of trademarks, patents, technology, designs, processes, intellectual property, or other proprietary advantage.
  3. What is a international joint venture?
    A company owned by 2 or more companies from different countries.
  4. When is a wholly owned international subsidiary created?
    When a company uses its own funds to construct or purchase 100% equity contro of a foreign subsidiary.
  5. What is global sourcing?
    The close coordination of R&D, manufacturing, & marketing across national boundaries.
  6. What is harmonization of accounting standards?
    A term used to describe the standardization of accounting methods & principles used in different countries thoughout the world.
  7. What is an exchange rate?
    The amount it cost to purchase one unit of currency with another country.
  8. What causes the debtor to incur a loss?
    An increase in exchange rate.
  9. Why is an adjusting entry made?
    To reconize any gains or losses that have accumulated on any foreign payables or receivables through the balance sheet date.
  10. When are gains & losses from changes in exchange rates recognized?
    In the period in which the change occurs.
  11. As foreign exchange rates fall,
    U.S. importers will gain & exporters will lose.
  12. When foreign exchange rates rise,
    Importers will lose.
  13. What is hedging?
    Taking offsetting positions so that your gains & losses tend to offset one another.
  14. What are future contracts?
    Accounts receivable in foreign courrency
  15. What does a U.S. dollar do and what does a weak dollar do?
    A U.S. dollar helps companies that ell foreign made goods in the U.S. market. A weak dollar gives a competitive advantage to companies that sell U.S. products both at home & abroad.
  16. What is apart of doing business?
Card Set
Accounting Chapter 15
test 1