Before a Foreign Subsidiary's Financial Statements Can Be Consolidated with Those

question 76

Multiple Choice

Before a foreign subsidiary's financial statements can be consolidated with those of its U.S. parent's:

• A)the subsidiary's financial statements must be translated into dollars.
• B)the parent's financial statements must be translated into the foreign currency.
• C)no translation adjustment is needed.
• D)none of the above need to occur.

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Definitions:

Gasoline

Gasoline is a volatile, flammable liquid derived from petroleum, primarily used as fuel in internal combustion engines.

Supply Curve

A visual chart that illustrates how the price of an item affects the amount of the item that sellers are prepared to offer.

Inferior Good

A product whose demand decreases as consumers' income levels increase, opposite to normal goods.

Income Rises

An increase in the amount of money received by individuals or households, often measured on an annual basis.