Which of the Following Statements Is Correct with Respect to IAS

question 34

Multiple Choice

Which of the following statements is correct with respect to IAS 21 The Effects of Changes in Foreign Exchange Rates?

• A)Foreign currency transactions are recorded, on initial recognition in the presentation currency, by applying to the foreign currency amount the spot exchange rate between the presentation currency and the foreign currency at the date of the transaction.
• B)At each end of the reporting period, foreign currency monetary items shall be translated using the closing rate.
• C)At each end of the reporting period non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction.
• D)At each end of the reporting period, non-monetary items that are measured at fair value in a foreign currency shall be translated using closing rate.

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Definitions:

Inferior Product Quality

Products that fail to meet acceptable standards or expectations in terms of performance, durability, or reliability.

Advertising

The action of calling public attention to products, services, or events, mainly through paid announcements in various media.

Market Power

A term describing the ability of a firm or group of firms to manipulate the price or quantity of goods and services in a market, due to a lack of competition.

McDonald's

A global fast-food restaurant chain known for its hamburgers, french fries, and breakfast items, characterized by its large-scale franchise operations.