Assuming That the Functional Currency of a Foreign Subsidiary Is

question 78

Multiple Choice

Assuming that the functional currency of a foreign subsidiary is the local currency, which of the following accounts would be translated at the current rate?

• A)​Additional Paid-in Capital
• B)​Retained Earnings
• C)​Allowance for Doubtful Accounts
• D)​Cost of Goods Sold

---

Definitions:

No-Trade Situation

A scenario in which countries or entities do not engage in international trade, often due to policies or barriers.

Domestic Price

The price of goods or services within a country's borders, distinct from international or foreign prices.

World Price

The global market price of a good or service, influenced by worldwide demand and supply.

Tariff

A tax imposed by a government on goods and services imported from other countries, often used to protect domestic industries from foreign competition.