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Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?

(A)20% inflation for each of the past 5 years.

(B)30% inflation for each of the past 3 years.

(C)35% inflation for each of the past 3 years.

(D)20%, 35%, and 40% inflation, respectively, for each of the past 3 years.

Larry the Lawyer is going to represent Bart's Brewskies in an upcoming litigation. Bart is being sued for representing his brewskies as being non-alcoholic, when in fact, they were 80-proof. Larry has asked Bart for a retainer of $1,000 before he'll even meet with Bart. Assuming the accrual basis of accounting is in play, that $1,000 is considered (for Larry): Mark one answer:

(A)Revenue and a receipt (B)An accounts receivable (C)A receipt (D)Revenue (E)An accounts payable

Correct Answer: C

Which one of the following is least likely an advantage associated with a wholly owned foreign subsidiary?

(A)Protection of proprietary information. (B)Ability to coordinate activities of the subsidiary with other activities. (C)Ability to maintain quality control. (D)Minimizes capital investment required.

Correct Answer: D

The General Fund pays an invoice for telecommunications that includes charges owed by the Water Utility Enterprise Fund. The Enterprise Fund subsequently remits its share of the telecommunications charges to the General Fund. The General Fund records the amount received from the Enterprise Fund as:

(A)An increase to revenue. (B)An increase to Operating Transfers In. (C)A decrease in expenses. (D)A decrease in Expenditures.

Correct Answer: D