Which of the Following Statements Is FALSE

question 46

Multiple Choice

Which of the following statements is FALSE?

• A) If a subsidiary is self-sustaining, the method of valuation of assets and liabilities is of no consequence in the translation because all of the assets are translated at the closing rate.
• B) If a subsidiary is an integrated foreign subsidiary, the method of valuation of assets and liabilities is of no consequence in the translation because all of the assets are translated at the closing rate.
• C) If a subsidiary is an integrated foreign subsidiary, a write-down to market may be required in the translated financial statements.
• D)If a subsidiary is an integrated foreign subsidiary, no write-down is required in the foreign currency financial statements.

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Definitions:

Raw Materials

Raw materials are the fundamental ingredients or components that are processed to manufacture goods.

Asset

An item or resource owned by an individual or a business, having economic value and expected to provide future benefits.

Direct Material

Raw materials that are directly incorporated into a finished product and can be easily traced.

Indirect Material

Materials used in the production process that can't be directly traced to a finished product, such as lubricants and cleaning supplies.