Under FASB 52, When a Net Translation Exposure Exists

question 19

Multiple Choice

Under FASB 52, when a net translation exposure exists,

• A)a derivatives hedge is necessary to bring balance to the consolidated balance sheet after an exchange rate change.
• B)a money market hedge is necessary to bring balance to the consolidated balance sheet after an exchange rate change.
• C)a cumulative translation adjustment account is necessary to bring balance to the consolidated balance sheet after an exchange rate change.
• D)none of the above

---

Definitions:

Manufacturing Cycle Efficiency

A measure of the efficiency of the production process, calculated as the ratio of value-added time to total cycle time.

Margin

The difference between the selling price of a product and its cost, typically expressed as a percentage of the selling price.

Turnover

The total sales made by a company in a specific period, or the rate at which inventory is sold and replaced.

Return On Investment

Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment compared to its cost.