18. Exchange gains and losses on a forward exchange contract that covers the same time period as the transaction which it provides a fair value hedge for should be recognized as

a. part of the original sales transaction.

b. other comprehensive income.

c. income from continuing operations.

d. an extraordinary item.

21. A subsidiary can be excluded from consolidation if

Select one:

a. formation of joint ventures.

b. the acquisition of an asset or group of assets constitutes a business.

c. acquisition of a not-for-profit entity by a for-profit business.

d. control rests with the majority owner.

27. Which of the following suggests that the foreign entity's functional currency is the parent's currency?

a. There is an active and primarily local market.

b. Sale prices are influenced by international factors.

c. Intercompany transaction volume is low.

d. Debt is serviced through local operations.