REFERENCE: Ref.10_05 a Subsidiary of Porter Inc. ,A U.S.company,was Located in a in a Foreign

question 33

Multiple Choice

REFERENCE: Ref.10_05
A subsidiary of Porter Inc. ,a U.S.company,was located in a foreign country.The functional currency of this subsidiary was the stickle (§) .The subsidiary acquired inventory on credit on November 1,2008,for §120,000 that was sold on January 17,2009 for §156,000.The subsidiary paid for the inventory on January 31,2009.Currency exchange rates between the dollar and the stickle were as follows:

-A highly inflationary economy is defined as

• A)Cumulative 5-year inflation in excess of 100%.
• B)Cumulative 3-year inflation in excess of 100%.
• C)Cumulative 5-year inflation in excess of 90%.
• D)Cumulative 3-year inflation in excess of 90%.
• E)Any country designated as a company operating in an underworld economy.

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Definitions:

Control

The ability to sway or guide the actions of individuals or the direction of happenings.

Luck

The concept of experiencing positive, negative, or unexpected outcomes without a clear cause or reason.

Other People

Refers to individuals or groups outside of oneself, often considered in the context of social relationships or interactions.

Excessively High

implies a level or amount that significantly surpasses what is normal, necessary, or reasonable.