LaSalle Ltd

question 13

Multiple Choice

LaSalle Ltd. ,a Canadian company has a subsidiary in Brazil that produces a component used in LaSalle's manufacturing.All of the components that the subsidiary produces is sold to LaSalle.The subsidiary also purchases most of the raw materials used in its production from LaSalle.Both companies use the Canadian dollar as its functional currency.Which of the following statements is true?

• A)The current rate method of translation should be used.
• B)Nothing needs to be done with the subsidiary's financial statements prior to consolidation.
• C)The subsidiary's financial statements need to be re-measured into the functional currency prior to consolidation.
• D)The subsidiary is considered to be an extension of the parent company and consolidation is not required.

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Definitions:

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities of a business that are due to be paid to creditors within a short period, usually one year.

General Journal

A primary accounting record used to track all financial transactions of a business, entered in chronological order.

Office Supplies

Consumable items used in an office setting, such as paper, pens, and office equipment.