If an Imbalance Results from the Accounting Method Used for Translation

question 52

Multiple Choice

If an imbalance results from the accounting method used for translation, the imbalance is taken either to ________ or ________.

• A) the bank; the post office
• B) depreciation; the market for foreign exchange swaps
• C) current income; equity reserves
• D) current liabilities; equity reserves

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the company's operating cycle, whichever is longer.

Contingent Liability

A potential financial obligation that may occur in the future depending on the outcome of a specific event.

Probable Event

An event that is likely to occur based on current evidence or past experience.

Estimable Amount

A quantifiable sum that can be accurately predicted or approximated in the accounting records.