What Would Be a Logical First Step That Should Be

question 32

Multiple Choice

What would be a logical first step that should be taken to restate foreign financial statements to conform to U.S.GAAP, assuming a four-column worksheet will be used to post debit and credit adjustments and reclassifications to arrive at U.S.GAAP statements?

• A)Convert the foreign currency amounts to U.S.dollars.
• B)Restate historical costs to current cost basis.
• C)Re-order foreign financial statements to U.S.format.
• D)Determine the amount of foreign exchange gains or losses.

---

Definitions:

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life, resulting in the same depreciation expense each year.

Depreciable Cost

The total cost of a tangible asset that can be depreciated over its useful life, excluding salvage value.

Depreciation Expense

Dividing the expense of a material asset throughout its service life.

Straight-Line Depreciation

A method of depreciating an asset evenly over its useful life, allocating an equal portion of the asset's cost as an expense in each accounting period until it reaches its salvage value.