If a Subsidiary Is Operating in a Highly Inflationary Economy

question 23

Multiple Choice

If a subsidiary is operating in a highly inflationary economy, how are the financial statements to be restated?

• A) Historical rate.
• B) Working capital rate.
• C) Translation.
• D) Remeasurement.
• E) Current rate.

---

Definitions:

Conditioned Stimulus

An initially impartial stimulus which, upon association with an unconditioned stimulus, gradually brings about a conditioned response.

Unconditioned Stimulus

A stimulus that naturally triggers a reflexive response without the need for prior learning.

Stimulus Generalization

A learning process in which the conditioned response is evoked by stimuli that are similar to the conditioned stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that becomes associated with a conditioned stimulus.