Stockholders' Equity of a Foreign Subsidiary Is Translated into Dollars

question 28

Multiple Choice

Stockholders' equity of a foreign subsidiary is 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.

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Definitions:

True Value

The actual or accurate value which scientific measurements aim to approximate.

Accurate

The accuracy of a measurement, calculation, or specification in relation to the true value or an agreed-upon standard.

Mass

A measure of the amount of matter in an object, usually measured in grams or kilograms.

Density

The mass of a substance per unit volume, a measure of how much mass is contained in a given volume.