Which of the Following Statements Is FALSE

question 46

Multiple Choice

Which of the following statements is FALSE?

• A) If a subsidiary is self-sustaining, the method of valuation of assets and liabilities is of no consequence in the translation because all of the assets are translated at the closing rate.
• B) If a subsidiary is an integrated foreign subsidiary, the method of valuation of assets and liabilities is of no consequence in the translation because all of the assets are translated at the closing rate.
• C) If a subsidiary is an integrated foreign subsidiary, a write-down to market may be required in the translated financial statements.
• D)If a subsidiary is an integrated foreign subsidiary, no write-down is required in the foreign currency financial statements.

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Definitions:

Uncollectible Receivables

Amounts owed to a company by customers that are considered unlikely to be paid, leading to their classification as bad debts.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Liquidity

The ability to convert assets into cash.