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:

Direct Labor Cost

The cost associated with employees who directly contribute to the production of goods, such as wages for factory workers.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period.

Production Equipment

Assets used in the manufacturing process to produce goods and services, including machinery, tools, and assembly lines.

Cost Object

Any item for which a separate measurement of costs is desired, including products, services, projects, or customers.