The Impact of Translating Transactions and Financial Statements from One

question 16

Multiple Choice

The impact of translating transactions and financial statements from one currency into another:

• A)is included in determining period profit or loss in both cases
• B)is normally included in period profit and loss for transactions, but for financial statements is recognised as other comprehensive profit and accumulated in a reserve called the foreign currency translation (FCT) reserve in chapter 24
• C)is normally included in period profit and loss for transactions, but is recognised as other comprehensive profit through retained profits for financial statements
• D)are both recognised directly as other comprehensive profit, with transactions recognised in retained profits and for financial statement in a reserve called the FCT reserve in chapter 24

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Definitions:

Vesting

The process by which an individual earns the right to receive full benefits from a pension plan or stock option over time.

Purpose

The reason for which something is done or created or for which something exists.

Creditor Beneficiary

A third party that benefits from a contract between two other parties, particularly when one party promises to pay a debt owed to the creditor beneficiary by the other party.

Legal Duty

An obligation imposed by law upon an individual or entity to act or refrain from acting in a certain manner.