The Translation Adjustment from Translating a Foreign Subsidiary's Financial Statements

question 93

Multiple Choice

The translation adjustment from translating a foreign subsidiary's financial statements should be shown as

• A)an asset or liability (depending on the balance)on the consolidated balance sheet.
• B)a revenue or expense (depending on the balance)on the consolidated income statement.
• C)a component of stockholders' equity on the consolidated balance sheet.
• D)a component of cash flows from financing activities on the consolidated statement of cash flows.
• E)an element of the notes which accompany the consolidated financial statements.

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Definitions:

Prepaid Insurance

The portion of insurance premiums that has been paid in advance and is recorded as an asset until the coverage period lapses.

Insurance Expense

It refers to the cost associated with purchasing insurance policies for protecting against risks and potential financial losses.

Adjusted Balance

An account balance reflecting all transactions except for those which have not yet been posted due to timing differences.

Accumulated Depreciation

The total depreciation amount charged to date on a company's fixed assets, reflecting the asset’s use and age.