Financial Statements Can Be Presented in Any Currency

question 41

Multiple Choice

Financial statements can be presented in any currency. When the currency selected for presentation purposes differs from an entity's functional currency, the financial statements need to be translated into this selected presentation currency. Which of the following statements regarding the translation of the financial statements into a presentation currency is FALSE?

• A)Assets and liabilities (including comparatives)are translated at the closing rate at the date of the statement of financial position.
• B)Income and expenses (including comparatives)for each statement of comprehensive income presented are translated at exchange rates at the dates the transactions took place.
• C)Income and expenses (including comparatives)for each separate income statement presented are translated at exchange rates at the dates the transactions took place.
• D)All resulting exchange differences are recognized in income.

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Definitions:

Cost of Living

The total amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time.

Consumption

The use of goods and services by households, or the action of using up a resource.

Income

The amount of money or goods that an individual or entity receives in exchange for providing a good or service, or through investing capital.

Utility Functions

Representations that quantify the satisfaction or happiness consumers gain from consuming various bundles of goods and services.