A US Company Has a Subsidiary Located in Great Britain

question 1

Multiple Choice

A U.S. company has a subsidiary located in Great Britain. If the U.S. dollar is the functional currency and the British pound is appreciating relative to the dollar, what will happen to the following ratios after remeasurement? $$\begin{array} { l c c } & \text { Inventory turnover } & \text { Net profit margin } \\\text { A) } & \text { Higher } & \text { Lower } \\\text { B) } & \text { Lower } & \text { Lower } \\\text { C) } & \text { Higher } & \text { Higher } \\\text { D) } & \text { Lower } & \text { Higher }\end{array}$$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Credit Sales

Transactions where goods or services are sold to a customer with payment to be received at a later date.

Create Invoices

The process of generating a bill for products or services rendered, detailing amounts owed by the customer to the business.

Enter Bills

The act of recording invoices received from vendors in the accounting system for tracking and payment purposes.

Customer Detail List

A comprehensive list or database that contains specific details and information about a business's customers.