Which of the Following Statements Is Correct

question 21

Multiple Choice

Which of the following statements is correct?

• A) Retained earnings are translated at the average exchange rate for the year.
• B) Capital stock of a foreign subsidiary is translated at the historical rate,that is,the rate prevailing on the date the subsidiary was acquired.
• C) Dividends are translated at the average exchange rate for the year.
• D) Assets and liabilities are translated at the historical rate prevailing when the subsidiary was acquired.

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Definitions:

State Change

A transition of a system or substance from one physical or thermodynamic state to another.

Latent Heat

The amount of heat absorbed or released by a substance during a phase change, without a change in temperature.