The Translation Method Used When the Functional Currency Is the Parent

question 2

Multiple Choice

The translation method used when the functional currency is the parent currency is the ________.

• A)current-rate method
• B)temporal method
• C)translate-restate method
• D)consolidation method

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Definitions:

Leverage

The use of borrowed funds to finance the purchase of assets or increase the potential return of an investment.

Management Effectiveness

A measure of how well a company's management team utilizes resources to generate profits.

Cost Conditions

The factors affecting the cost of production or providing services, including raw materials, labor, and overhead expenses.

EBIT

A financial metric that measures a firm's profit from its usual business operations, essentially its earnings before deducting interest and taxes.