Under the U

question 10

Multiple Choice

Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the local currency is the functional currency, then:

• A) the translation method to be used is not obvious.
• B) translation is accomplished through the temporal method.
• C) translation is not required.
• D) translation is accomplished through the current rate method.

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Definitions:

Capital Account Balances

The amounts recorded in the capital accounts of a company or partnership, reflecting owners' contributions and the accumulated profits or losses.

Liquidation Transactions

Financial activities involved in dissolving a business, including selling off assets to pay creditors and distributing remaining funds to shareholders.