Which of the Following Is True for the Exchange Rate

question 4

Multiple Choice

Which of the following is true for the exchange rate used to translate long-term receivables?

• A) Current exchange rate under both current rate method and temporal approach.
• B) Current exchange rate under current rate method and historical rate under the translation method.
• C) Historical exchange rate under current rate method and current rate under the translation method.
• D) Historical exchange rate under both current rate method and temporal approach.

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Definitions:

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, clearing out revenues and expenses for the next period.

Wages Expense

The total cost incurred by a company for paying its employees, often reflected as an operating expense on the income statement.

Rent Expense

The cost incurred by a business to utilize property or equipment for operations, which is recorded as an expense on the income statement.

Depreciation Expense

The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life.