When Translating Foreign Currency Denominated Financial Statements into the Functional

question 8

Multiple Choice

When translating foreign currency denominated financial statements into the functional currency, the exchange differences are recognised:

• A) as an item of gain or loss in the statement of profit or loss and other comprehensive income;
• B) directly in the retained earnings account;
• C) as a deferred asset or liability;
• D) as a separate component of equity.

---

Definitions:

Means

The average value in a data set, calculated as the sum of all values divided by the number of values.

Widely Dispersed

Describes data that is spread out over a large range, showing significant variability within the dataset.

Shape Of The Distribution

The form or appearance of the graph of a distribution, which can include features like skewness and kurtosis.

Interval Variables

A type of quantitative variable that represents numeric data with meaningful intervals but without a true zero point.