In Their Research Published in 1988 Related to Translating Foreign

question 42

Multiple Choice

In their research published in 1988 related to translating foreign currency financial statements, Doupnik and Evans found that U.S. multinationals were biased in favor of using a foreign currency as the functional currency. What reason did the researchers give for this management decision?

• A) It was easier than proving to the FASB that a subsidiary's functional currency was the U.S. dollar.
• B) Doing so allowed companies greater latitude in selecting the method of translating foreign currency financial statements.
• C) This allows the use of the current method, which defers recognizing translation gains or losses in income.
• D) This allows the use of the temporal method, which defers recognizing transaction adjustments in income.

---

Definitions:

Optimal Number

The most favorable, efficient, or effective quantity or value given a certain context or criteria.

Monthly Profit

The total revenue of a business minus its expenses, costs, and taxes calculated on a monthly basis.

Total Optimal Profit

The maximum possible profit that can be achieved in a given scenario, taking into account all constraints and limitations.

Solver

A software tool used in optimization that finds the optimal solution to a problem by varying the values of variables within constraint boundaries.