Which of the Following Statements Is Correct

question 23

Multiple Choice

Which of the following statements is correct?

• A) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using closing rates.
• B) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using average rates.
• C) If the functional currency of the foreign operation is different than the parent's functional currency, the contributed capital must be translated using historical rates.
• D) If the functional currency of the foreign operation is the same as the parent's functional currency, the contributed capital must be translated using average rates.

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Definitions:

Secondary Market

The marketplace for the buying and selling of pre-owned securities or financial instruments.

IBM

International Business Machines Corporation, a multinational technology company known for its computer hardware, software, and IT services.

Direct Cash Flows

A financial statement that provides data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.