Which of the Following Accounts Would Be Translated to the Reporting

question 25

Multiple Choice

Which of the following accounts would be translated to the reporting currency at the current rate of exchange for an integrated subsidiary?

• A)Sales occurring evenly throughout the year
• B)Deposits received from customers for services to be rendered
• C)Capital assets
• D)Inventory carried at market under the lower-of-cost-or-market principle

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Definitions:

Treasury Bond

Long-term, fixed interest government debt securities with a maturity of more than ten years.

STRIPPED Cash Flows

Cash flows from financial instruments that have been separated from their financial structure, often used in securitization.

Arbitrage

The practice of taking advantage of a price difference between two or more markets, striking a combination of matching deals that capitalize upon the imbalance.

Forward Rates

Interest rates or currency exchange rates fixed now for transactions that will occur at a future date.