Assets and Liabilities of a Foreign Subsidiary Are Translated into Dollars

question 7

Multiple Choice

Assets and liabilities of a foreign subsidiary are translated into dollars on a consolidated balance sheet at the:

• A)exchange rate in effect on the date of the financial statements.
• B)anticipated exchange rate in effect over the next 5 years.
• C)average exchange rate in effect over the past 5 years.
• D)older, historical exchange rates on the date of the purchase of the subsidiary's stock.

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Definitions:

Accurate

The quality of being correct in all details; exactness.

Cent

A monetary unit in various countries, equal to one-hundredth of a basic unit of currency.

Cent

A cent is a monetary unit in many countries, representing one hundredth of the base unit, such as a dollar.

Accurate

Describes something that is exact and free from errors.