Under the Translation Method Required by AASB 121,the Approach to Translating

question 2

Multiple Choice

Under the translation method required by AASB 121,the approach to translating a foreign operation's accounts includes:

• A) Non-monetary items included in the balance sheet are translated at the rate current at reporting date.
• B) Equity at the date of investment is translated at the rate for the when the investment was acquired.
• C) Revenue and expense items are translated at the exchange rates current at the applicable transaction dates.
• D) Monetary items included in the balance sheet are translated at the exchange rate current at the reporting date.
• E) All of the given answers.

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Definitions:

Cash Payments

Transactions that involve the transfer of cash from one entity to another.

Inventory Increase

An rise in the quantity or value of goods held by a company for the purpose of sale in the normal course of business.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the good.

Accounts Payable Decrease

A reduction in the amount a company owes to its suppliers or vendors, indicating payments have been made.