Under the Current-Rate Method, at What Exchange Rate Is Depreciation

question 14

Multiple Choice

Under the current-rate method, at what exchange rate is depreciation expense translated?

• A)At the average rate for the year
• B)At the historical rate when the related assets were acquired
• C)At the closing rate
• D)At the rate at the beginning of the fiscal period

---

Definitions:

External Benefit

Positive effects of a transaction or activity on third parties not directly involved in the transaction, which are not reflected in the market price.

Negative Externality

A negative externality is a cost imposed on a third party not involved in the production or consumption of a good or service, such as pollution.

Positive Externality

A beneficial effect experienced by a third party who did not choose to incur that benefit, often resulting from an individual's or firm's actions.

Corrective Tax

A tax designed to internalize externalities, effectively correcting market outcomes that might otherwise result in social inefficiency.