Under the Current Rate Method

question 65

Multiple Choice

Under the current rate method,

• A)income statement items are to be translated at the exchange rate at the dates the items are recognized.
• B)since a) is generally impractical, an appropriately weighted average exchange rate for the period may be used for translation.
• C)all balance sheet accounts are translated at the current exchange rate, except stockholders' equity.
• D)all of the above

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares at certain times during their life, usually at the discretion of the bondholder.

Bearer Bonds

A type of fixed-income security that is owned by the holder or bearer, instead of being registered to a specific owner.

Sinking Fund Bonds

Bonds that include a provision for the issuer to create a fund for repaying the bond principal at or before maturity.

Term Bonds

Bonds that have a specific maturity date on which the principal is due to be paid to bondholders.