Which of the Following Is Not Correct Regarding the Translation

question 17

Multiple Choice

Which of the following is not correct regarding the translation of a foreign entity's accounts?

• A) Translation uses the historical rate at the date a foreign subsidiary was acquired for the paid-in capital amounts.
• B) Translation uses the current rate method.
• C) Translation should be used in a translating the accounts of a foreign entity operating in a highly inflationary economy.
• D) Foreign currency translation adjustments are displayed under the accumulated comprehensive income section of the translated balance sheet.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the company.

Financial Data

Numeric information related to financial aspects of a business, including income, expenses, assets, and liabilities.

Sales On Account

Transactions where goods or services are provided to a customer with an agreement to pay later.

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.