Complete the Following Statement by Choosing the Best Response

question 22

Multiple Choice

Complete the following statement by choosing the best response:
If the functional currency of a foreign subsidiary is the local currency of the country in which the foreign subsidiary operates, then

• A) the foreign subsidiary's financial statements are translated into U.S. dollars.
• B) the foreign subsidiary's financial statements must be remeasured into U.S. dollars.
• C) only the foreign subsidiary's assets and liabilities must be remeasured into U.S. dollars
• D) only retained earnings must be remeasured into U.S. dollars.

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Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes, reflecting the value of goods and services at constant prices.

GDP

Gross Domestic Product is an indicator of a nation's economic health, showing the total value of all products and services made within a specific timeframe.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP to account for inflation.

Real GDP

The measure of a nation's economic output adjusted for price changes (inflation or deflation), reflecting the real quantity of goods and services produced.