When Translating the Revenue and Expenses in the Statement of Profit

question 16

Multiple Choice

When translating the revenue and expenses in the statement of profit or loss and other comprehensive income, theoretically each item of revenue and expense should be translated using the spot exchange rate between the:

• A) functional currency and the foreign currency on the reporting date;
• B) presentation currency and the functional currency on the reporting date;
• C) functional currency and the foreign currency on the date the transaction occurred;
• D) presentation currency and the local currency on the transaction date.

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Definitions:

Judicial Review

The power of courts to assess the constitutionality of laws and actions of the executive and legislative branches.

Cost-Effective

Providing the best possible outcome or value for the amount of money spent.

Court Action

A legal proceeding in which a case is brought before a court of law to be adjudicated.

Without Prejudice

A legal term indicating that a communication cannot be used as evidence in court, often used in negotiations to allow for candid discussions.