When Translating into the Functional Currency, Foreign Currency Denominated Non-Monetary

question 19

Multiple Choice

When translating into the functional currency, foreign currency denominated non-monetary assets measured at historical cost must be translated using the:

• A) spot rate at end of reporting period.
• B) average rate for the reporting period.
• C) exchange rate when the historical cost was determined.
• D) exchange rate when the historical cost was revalued to fair value.

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Definitions:

Annual Instalment

Regular payments made once a year to pay off a debt or an obligation.

Financial Liability

A financial liability refers to the obligation to pay money to another party, typically arising from borrowing money, purchasing goods or services on credit, or other financial agreements.

Deferred Revenue

Money received by a company for goods or services which have not yet been delivered or performed.

Notes Payable

Short-term or long-term liabilities representing amounts owed to creditors, documented by promissory notes.