When Translating into the Presentation Currency the Translation Difference Is

question 4

Multiple Choice

When translating into the presentation currency the translation difference is recognised:

• A) in retained earnings.
• B) in profit or loss.
• C) as a separate component of equity.
• D) as an asset or liability, depending on whether it is a debit or credit balance.

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Annual Cash Operating Inflows

Annual cash operating inflows refer to the total cash receipts a business receives from its operating activities during a fiscal year.

Salvage Value

The estimated residual value of an asset at the end of its useful life, reflecting what it can be sold for or scrapped.

Payback Period

The amount of time it takes for an investment to generate cash flow sufficient to recover its initial cost.