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E12-3 Matching Terms LO 12-1, 12-2, 12-3, 12-4, 12-5, 12-6, 12-7, 12-8 Match the items in the left-hand column with the terms in the right-hand

E12-3 Matching Terms LO 12-1, 12-2, 12-3, 12-4, 12-5, 12-6, 12-7, 12-8

Match the items in the left-hand column with the terms in the right-hand column. Terms may be used once, more than once, or not at all.image text in transcribed

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Terms Descriptions of Terms 1. The currency of the primary economic environment in which the entity operates. The functional currency for a U.S. subsidiary located in a country with >100 percent inflation over the 2. last three years. 3. Translation of all assets and liabilities of a foreign subsidiary using the foreign exchange rate at the balance sheet date. 4. Restatement of the fixed assets of a foreign subsidiary into U.S. dollars using historical exchange rates. 5. Inclusion of this gain or loss on the U.S. company's income statement as part of net income. 6. The item that balances the debits and credits of the foreign subsidiary's adjusted trial balance in U.S. dollars, assuming the functional currency is the currency of the foreign subsidiary's country. The item that balances the debits and credits of the foreign subsidiary's adjusted trial balance in U.S. 7. dollars, assuming the functional currency is the U.S. dollar. 8. Restatement of depreciation expense and cost of goods sold of a foreign subsidiary using historical exchange rates. 9. An analysis of a foreign subsidiary's cash flows, sales prices, sales markets, expenses, and financing. 10. The periodic change in this item reported as a component of other comprehensive income. Current rate method Functional currency Functional currency indicators Remeasurement gain or loss Remeasurement method Transaction gain or loss Translation adjustment U.S. dollar

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