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accounts data bank

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Question;10. Which of the following defines a foreign-based;entity that uses a functional currency different from the local currency?;I. A U.S. subsidiary in Britain maintains its accounting records in pounds;sterling, with the majority of its transactions denominated in pounds sterling.;II. A U.S. subsidiary in Peru conducts virtually all of its business in Latin;America, and uses the U.S. dollar as its major currency.;A. I.;B. II.;C. Both I and II.;D. Neither I nor II.;11. When the local currency of the foreign subsidiary;is the functional currency, a foreign subsidiary's inventory carried at cost;would be converted to U.S. dollars by;A. translation using historical exchange rates.;B. remeasurement using historical exchange rates.;C. remeasurement using the current exchange rate.;D. translation using the current exchange rate.;12. When the local currency of the foreign subsidiary;is the functional currency, a foreign subsidiary's income statement accounts;would be converted to U.S. dollars by;A. translation using historical exchange rates.;B. remeasurement using current exchange rates at the time of statement preparation.;C. translation using average exchange rate for the period.;D. remeasurement using the current exchange rate at the time of statement;preparation.;13. If the restatement method for a foreign subsidiary;involves remeasuring from the local currency into the functional currency, then;translating from functional currency to U.S. dollars, the functional currency;of the subsidiary is;I. U.S. dollar.;II. Local currency unit.;III. A third country's currency.;A. I;B. III;C. II;D. Either I or II;14. If the U.S. dollar is the currency in which the;foreign affiliate's books and records are maintained, and the U.S. dollar is;also the functional currency;A. the translation method should be used for restatement.;B. the remeasurement method should be used for restatement.;C. either translation or remeasurement could be used for restatement.;D. no restatement is required.;15. All of the following stockholders' equity accounts;of a foreign subsidiary are translated at historical exchange rates;except;A. retained earnings.;B. common stock.;C. additional paid-in capital.;D. preferred stock.;16. Dividends of a foreign subsidiary are translated;at;A. the average exchange rate for the year.;B. the exchange rate on the date of declaration.;C. the current exchange rate on the date of preparation of the financial;statement.;D. the exchange rate on the record date.

 

Paper#45029 | Written in 18-Jul-2015

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