The Temporal Method of Translating Financial Statements Is Used When

question 8

Multiple Choice

The temporal method of translating financial statements is used when

• A) the local currency is the functional currency.
• B) the local currency is the reporting currency.
• C) the parent's reporting currency is the functional currency.
• D) the subsidiary's reporting currency is the functional currency.

---

Definitions:

Reserve Requirement

A regulation set by central banks determining the minimum amount of reserves that must be held by a commercial bank.

Credit Availability

Credit availability refers to the ease with which individuals and businesses can obtain loans or credit from financial institutions, which can significantly affect economic activity by influencing spending and investment.

Funds Lendability

The suitability and capability of funds or capital to be lent to borrowers, often considered by financial institutions.

Depression

A severe, sustained period of economic contraction in one or more economies.