Certain Balance Sheet Accounts of a Foreign Subsidiary of Parker

question 96

Multiple Choice

Certain balance sheet accounts of a foreign subsidiary of Parker Company at December 31, 2011, have been restated into U.S. dollars as follows:
-If the current rate used to restate these amounts is $.95, what was the average historical rate used to arrive at the total amount for historical rates?

• A) $.90.
• B) $1.00.
• C) $.95.
• D) $.9474.
• E) $1.0556.

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Definitions:

Physical Flow

The movement of goods and materials through a production process or supply chain.

Accounting

The process of recording, classifying, summarizing, and interpreting financial transactions and events to provide relevant information for decision-making.

Journalize

Refers to the process of recording business transactions in the journal as part of the accounting cycle.

Reporting Period

The span of time covered by the financial statements of a business.