Question
1) Which of the following statement is INCORRECT regarding translation of retained earnings? a To obtain the amount of translated retained earnings, one uses the
1)
Which of the following statement is INCORRECT regarding translation of retained earnings?
a | To obtain the amount of translated retained earnings, one uses the retained earnings in foreign currency and applies the current exchange rate | |
b | To obtain the amount of translated retained earnings at the end of year, one would use net income from the translated income statement | |
c | To obtain the amount of translated retained earnings at the end of year, one applies historical exchange rate on declaration date on the dividends in foreign currency | |
d | Ending retained earnings from current year will become the beginning retained earnings for next year |
2)
Which of the following statement is incorrect?
a | A foreign operation has a net liability balance sheet exposure would result in a positive translation adjustment if foreign currency depreciates. | |
b | A foreign operation has a net liability balance sheet exposure would result in a negative translation adjustment if foreign currency appreciates. | |
c | A foreign operation has a net asset balance sheet exposure would result in a positive translation adjustment if foreign currency depreciates. | |
d | A foreign operation has a net asset balance sheet exposure would result in a positive translation adjustment if foreign currency appreciates. |
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