Multinational US Companies Usually Have a Number of Foreign Subsidiaries

question 89

Multiple Choice

Multinational US companies usually have a number of foreign subsidiaries with financial statements expressed in foreign currency. When the consolidated financial statements are prepared, to combine the financial statements of the US parent and all of its subsidiaries, the consolidation process involves multiple steps. Which of the following statements about the combining process and the resultant consolidated financial statements is always true for multinational US companies?

• A)The foreign subsidiaries are separated into three categories, each of which receives different treatment.
• B)The foreign entity's financial statements are converted into dollars.
• C)Foreign currency translation adjustments have no effect on cash flows.
• D)The foreign currency translation adjustments are included in consolidated income.

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Definitions:

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The degree to which the tasks of different individuals or groups are connected, requiring coordination and cooperation to achieve goals.

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A division within a company that is responsible for the production of goods or products.

Required Products

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