The Accounting Standard, AASB 121 the Effects of Changes in Foreign

question 24

Multiple Choice

The accounting standard, AASB 121 The Effects of Changes in Foreign Exchange Rates, covers which of the following?

• A) Treatment of any exchange differences that arise.
• B) Subsequent measurement of assets and liabilities at the end of the reporting period.
• C) Initial recognition and measurement of financial statement elements arising from foreign currency transactions.
• D) All of these options.

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Definitions:

Homeostasis

The process by which living organisms regulate their internal environment to maintain a stable, optimal condition despite external changes.

Need

A requirement for something because it is essential or very important.

Drive-reduction Theory

A psychological motivation theory suggesting that the act of fulfilling basic physiological needs reduces drive and generates a state of psychological equilibrium or satisfaction.

Famine

A severe shortage of food resulting in widespread hunger, malnutrition, and increased mortality.