Under FASB ASC 830, Foreign Currency Matters, When the Temporal

question 39

Multiple Choice

Under FASB ASC 830, Foreign Currency Matters, when the temporal method is used, how are translation adjustments treated in the consolidated financial statements?

• A) As gains or losses on the current period consolidated income statement
• B) As prior period adjustments to retained earnings of the parent
• C) As part of other comprehensive income on the consolidated balance sheet
• D) None of the above because the temporal method is not allowed under FASB ASC 830.

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Definitions:

Journal Entries

The basic method of recording financial transactions in accounting, which involves making entries to accounts in a double-entry bookkeeping system.

Cash Short And Over

An accounting term referring to a discrepancy between the amounts of cash available at the end of a period and the expected amount, which could be more (over) or less (short).

Office Supplies

Items such as pens, paper, staplers, and other materials used in an office setting for daily operations and not directly associated with the manufacturing process.

Bank Reconciliation

A process used to verify the accuracy of bank statements with a company's financial records, identifying any discrepancies.