Select the best answer to each of the following questions:

1. Methods used to account for transactions between companies in different nations when goods are received on one date and the invoice is paid on another date include:

a. Time-of-transaction method.

b. Time-of-settlement method.

c. Current-rate method.

d. \(\mathbf{a}\) and \(\mathbf{b}\) are correct.

2. Which of the following statements is false regarding translating the financial statements of foreign subsidiaries?

a. Under the current-rate approach, all assets and liabilities are translated at the exchange rate in effect on the balance sheet date.

b. Under the current-noncurrent method, current assets and current liabilities are translated at the current rate, and noncurrent items are translated at their historical rates.

c. Under the monetary-nonmonetary method, nonmonetary assets and liabilities are translated at their historical rate.

d. The nations of the world now have settled on the current-rate method.

3. Variations between nations in accounting for inventories include all except which of the following?

a. The basis for determining cost.

b. Whether cost should be increased or decreased to reflect changes in market value.

c. Whether inventories should be written down to an amount below both cost and market.

d. Whether standard costs should be used.

4. In accounting for the effects of inflation, the approach that seems to be favored by most nations that have adopted an approach is:

a. Current cost.

b. Constant dollar (general price-level) adjusted statements.

c. A combination of \(\mathbf{a}\) and \(\mathbf{b}\) in one set of financial statements.

d. Both \(\mathbf{a}\) and \(\mathbf{b}\) as two sets of financial statements.