Which of the Following Statements Is Correct

question 5

Multiple Choice

Which of the following statements is correct?

• A) If a foreign currency weakens with respect to the Canadian dollar, both foreign operations with a functional currency that is the Canadian dollar and not the Canadian dollar, will show a foreign exchange gain.
• B) If a foreign currency weakens with respect to the Canadian dollar, both foreign operations with a functional currency that is the Canadian dollar and not the Canadian dollar, will show a foreign exchange loss.
• C) If a foreign currency weakens with respect to the Canadian dollar, a foreign operation with a functional currency that is not the Canadian dollar will show a foreign exchange gain while a foreign operation with a functional currency that is the Canadian dollar will show a foreign exchange loss.
• D) If a foreign currency weakens with respect to the Canadian dollar, a foreign operation with a functional currency that is not the Canadian dollar will show a foreign exchange loss while a foreign operation with a functional currency that is the Canadian dollar will show a foreign exchange gain.

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Definitions:

Net Income

Net earnings of a firm post the subtraction of taxes, costs, and other expenditures from its aggregate revenue.

Significant Influence

The power to participate in financial and operating policy decisions of a business, but not control those policies.

Database

A structured set of data held in a computer, especially one that is accessible in various ways.

Amortized

The process of gradually paying off a debt or spreading the cost of an intangible asset over its useful life for accounting and tax purposes.