Which of the Following Methods Uses the Current Exchange Rate

question 19

Multiple Choice

Which of the following methods uses the current exchange rate to consolidate all accounts of a foreign subsidiary into the financial statements of its parent?

• A)current rate method
• B)temporal method
• C)current/noncurrent method
• D)none of the above

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Definitions:

Carrying Values

The amount at which an asset is recognized on the balance sheet after deducting any accumulated depreciation and impairment charges.

Deferred Tax Account

An account on a company’s balance sheet that is a provision for income taxes that have been accrued but are not yet due.

Unrealized Profits

Profits that have been earned but not yet realized through a transaction, such as an increase in value of an investment that has not been sold yet.

Inventory

the totality of goods and materials held by a company for the purpose of resale, manufacturing, or repair.