On Consolidation Using the Canadian Dollar Presentation, the Appropriate Exchange

question 48

Multiple Choice

On consolidation using the Canadian dollar presentation, the appropriate exchange rate for translating a plant asset in the balance sheet of a foreign subsidiary in which the functional currency is the Canadian dollar is the:

• A)Current exchange rate.
• B)Average exchange rate for the current year.
• C)Historical exchange rate in effect when the plant asset was acquired or the date of acquisition, whichever is later.
• D)Forward rate.

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Definitions:

Collude

To engage in a secret agreement or cooperation, especially with the intention of cheating or deceiving others.

Cartel

An association of independent businesses or countries that work together to control production, pricing, and marketing of goods to monopolize a market.

Monopoly

A firm that is the sole seller of a product without any close substitutes.

Game Theory

The study of how people behave in strategic situations