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

question 30

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

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Definitions:

Benefactors

Benefactors are individuals, organizations, or other entities that provide financial or other types of support to individuals, organizations, or causes.

Corporate Form

A business structure where the entity is distinct from its owners, providing limited liability protection, ease of transferring ownership, and potential for growth.

Legal Entities

Organizations that have legal rights and obligations, including the capacity to enter into contracts and own property, distinct from their members.

Partnerships

A legal arrangement where two or more individuals share ownership of a business, including its profits, losses, and responsibilities.