Answer

29. Which of the following are indications that the subsidiary is not autonomous? A) B) C) D) All of the above Significant assets may be acquired from the parent or otherwise by expending the parent's functional currency. The sale of assets may make available to the parent units of the parent's functional currency Financing is primarily by the parent or otherwise in the parent's functional currency 30, Which of the following best describes the translation of financial statements? A) B) C) D) All equity accounts are translated at their respective historical exchange rates All asset, liability and equity accounts are translated at the current exchange rate on the financial statement date. All asset, liability and equity accounts are translated at an average exchange rate for the period. Common stock and APIC accounts are translated at their respective historical exchange rates. 31. Which of the following statements is true? A) B) C) D) Revenues and expenses can only be translated at the exchange rate in effect when recognized US GAAP permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. Companies are required to use an averaging method that weights transactions by the relative proportion of sales volume during the period. Companies are permitted to use an average exchange rate for the period to translate revenues and expenses under the assumptions that revenues and expenses occur evenly throughout the period. Page 7