If the Functional Currency of the Foreign Operation Is the Same

question 59

Multiple Choice

If the functional currency of the foreign operation is the same as the parent's functional currency, which of the following statements is correct?

• A) The foreign operation's financial statements are translated using the functional currency translation (FCT) method.
• B) The foreign operation's financial statements are translated using the presentation currency translation (PCT) method.
• C) The foreign operation is classified as a foreign affiliate.
• D) The investment in the foreign operation is classified as a non-monetary asset.

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Definitions:

Project Cost

The total financial expenditure incurred in the planning, execution, and completion of a project.

Returns

The gains or losses made from an investment over a particular period, often expressed as a percentage of the investment's initial cost.

Interest Rate

The percentage of an amount of money charged by lenders to borrowers for the use of money, usually expressed as an annual percentage.

Bonds

Fixed-income securities issued by corporations, municipalities, or governments to finance projects or operations, representing a loan made by an investor to the issuer.