8. When remeasuring a subsidiarys accounts to its functional currency, which of the following transactions or adjustments, made by the subsidiary, affect its exposure to remeasurement gains and losses?

Select one:

a. Purchasing inventory on account

b. Borrowing money from the bank

c. Recording depreciation expense

d. Recording customer payments of accounts receivable

7. When translating the subsidiarys accounts to the parents reporting currency, which of the following transactions, made by the subsidiary, affect its exposure to translation gains and losses?

Select one:

a. Purchasing plant assets on account

b. Borrowing money from the bank

c. Purchasing inventory on account

d. Recording sales revenue

6. A U.S. parent has a subsidiary located in Brazil. In which situation will the U.S. parent translate the account balances of the subsidiary to U.S. dollars?

Select one:

a. The level of inflation in Brazil is extremely high.

b. The subsidiarys accounts are maintained in U.S. dollars.

c. The parents customers are mostly located in Brazil.

d. The subsidiarys customers are mostly located in Brazil.

4. A U.S. parent has a subsidiary in Canada. Its account balances are measured in Canadian dollars. If the parents functional currency is the U.S. dollar and the subsidiarys functional currency is the U.S. dollar, conversion of the subsidiarys accounts to U.S. dollars involves

Select one:

a. Both remeasurement and translation

b. No conversion to another currency

c. Only translation

d. Only remeasurement