A Translation Adjustment May Be Necessary When

question 37

Multiple Choice

A translation adjustment may be necessary when:

• A) notes to financial statements are converted from one language to another.
• B) foreign currency financial statements are converted to another currency.
• C) purchasing goods from a domestic company.
• D) hedging foreign currency.

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Definitions:

Unearned Sales Revenue

Money received by a company for goods or services yet to be delivered or performed.

Depreciable Asset

An asset subject to depreciation, representing the decline in value over time due to use, wear and tear, or obsolescence.

Investing Activities

Financial activities related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Operating Activities

Activities that constitute the primary or main activities of a business, such as sales and service delivery, which are reflected in the company's cash flow.