Post-Acquisition Date Retained Earnings That Are Denominated in a Foreign

question 2

Multiple Choice

Post-acquisition date retained earnings that are denominated in a foreign currency are:

• A) translated into the functional currency using the rate current at the latest end of reporting period.
• B) translated into the functional currency using the average rate since acquisition date.
• C) translated into the functional currency using the rates at the end of each year since acquisition date.
• D) balances carried forward from translation of previous statement of comprehensive income and do not need to be translated.

---

Definitions:

Price Reduction

A decrease in the selling price of a product or service, often to increase demand or sales volume.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific segment or department within a company.

Net Operating Income

Net operating income reflects a company’s financial performance by showing profit calculated from its core business operations, excluding taxes and interest expenses.

Price Reduction

A decrease in the selling price of a product or service, often used as a strategy to increase demand or sales volume.