When the Functional Currency Is Not the Same as the Presentation

question 50

Multiple Choice

When the functional currency is not the same as the presentation currency, the investee must translate the financial statements using the____________ for balance sheet accounts and ________________ for income statement accounts.

• A)year-end closing rate; year-end closing rate
• B)year-end closing rate; the rate when the transaction occurred
• C)the rate when the transaction occurred; year-end closing rate
• D)the rate when the transaction occurred; the rate when the transaction occurred.

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Definitions:

Fixed Cost

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Patent

A legal document granted by the government, giving an inventor exclusive rights to make, use, and sell an invention for a certain number of years.

Demand Function

A mathematical function that describes the quantity of a good that consumers are willing and able to purchase at various prices.

Subsidy

A financial contribution granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.