When the Functional Currency of a Foreign Operation Is a Foreign

question 6

Multiple Choice

When the functional currency of a foreign operation is a foreign currency,translation of financial statements is accomplished through which method?

• A) Current rate method
• B) Temporal method
• C) Either current rate or temporal method
• D) None of the above

---

Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Retained Earnings

The portion of a business's profits not distributed to shareholders but reinvested in the business or held for future use.

Surplus Cash

Excess funds that a company retains over its necessary working capital and capital expenditure requirements, often available for investment or distribution.

Dividends

A portion of a company's earnings distributed to shareholders, often in the form of cash or additional stock.