The Underlying Principle of the Current/noncurrent Method Is That Assets

question 13

Multiple Choice

The underlying principle of the current/noncurrent method is that assets and liabilities should be translated based on their maturity.

• A)Current assets and liabilities are converted at the current exchange rate in effect when the cash flow associated with the asset or liability actually occurred. Non-current assets and liabilities are translated at the historical exchange rate that prevailed when the asset was recognized.
• B)Current assets and liabilities, which by definition have a maturity of one year or less, are converted at the current exchange rate. Non-current assets and liabilities are translated at the historical exchange rate.
• C)All assets and liabilities are converted at the current exchange rate.
• D)None of the above

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