When Using the Current Rate Method, the Translation Adjustment from Translating

question 5

Multiple Choice

When using the current rate method, the translation adjustment from translating a foreign subsidiary's financial statements should be shown as

• A) An asset or liability (depending on the balance) in the consolidated balance sheet.
• B) A revenue or expense (depending on the balance) in the consolidated income statement.
• C) A component of stockholders' equity in the consolidated balance sheet.
• D) A component of cash flows from financing activities in the consolidated statement of cash flows.
• E) An element of the notes which accompany the consolidated financial statements.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing to buy.

Substitute

a product or service that can be used in place of another to satisfy similar needs or desires.

Complement

Goods or services that, when used together, enhance each other's value to the consumer.

Income Increase

A rise in the amount of money received, especially on a regular basis, through work, investments, or business.