Using the Temporal Method of Translating Foreign Currency Financial Statements

question 44

Multiple Choice

Using the temporal method of translating foreign currency financial statements, what basis should be employed when using the "lower of cost or market" rule for inventory valuation?

• A) Lower of parent currency cost or parent currency market at current exchange rate
• B) Lower of subsidiary currency cost or subsidiary currency market at appropriate exchange rate
• C) Lower of parent currency cost or parent currency market at appropriate exchange rate
• D) Lower of subsidiary currency cost or parent currency market at current exchange rate

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Definitions:

Physical Force

The use of bodily power or strength to exert pressure, move, or otherwise manipulate something or someone.

Threats

External or internal factors perceived to cause potential harm or danger to individuals or groups.

Rough-And-Tumble Play

Social interaction involving chasing and play fighting with no intent to harm.

Aggression

Behavior intended to harm or intimidate others, which can be physical, verbal, or psychological.