Excellent Inc

question 19

Multiple Choice

Excellent Inc. is located in the U.S., but it has subsidiaries in Japan. When the yen depreciates relative to the U.S. dollar, what is the direction of the translation adjustment to consolidate Excellent's financial statements?

• A) When there is net asset exposure, the translation adjustment will be positive.
• B) There will be no adjustment necessary unless the difference is realized.
• C) When there is net liability exposure, the translation adjustment will be positive.
• D) The direction of the adjustment is indeterminate.

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Definitions:

Sales In Inventory

This term seems incorrect or incomplete. The correct term is likely "Inventory," which refers to the goods and materials a business holds for the purpose of resale.

FIFO

First In, First Out (FIFO) is an inventory valuation method where the costs of the oldest items are the first to be expensed, used to calculate cost of goods sold.

Cost Of Goods Sold

The specific costs involved in producing goods for sale by a company, covering materials and labor.

LIFO Method

"Last In, First Out," an inventory costing method where the most recently produced or purchased items are recorded as sold first.