PLEASE ANSWER ALL MCQs

1. Which of the following statements is correct?

Multiple Choice

a) If the functional currency of the foreign operation is different than the parent's functional currency, depreciation and amortization must be translated using closing rates.

b) If the functional currency of the foreign operation is different than the parent's functional currency, depreciation and amortization are translated using average rates.

c) If the functional currency of the foreign operation is the same as the parent's functional currency, depreciation and amortization must be translated using closing rates.

2. Pubco Corporations wholly-owned European subsidiary has a European dollar functional currency. In translating its account balances into Canadian dollars for reporting purposes, which one of the following accounts would be purely translated at historical exchange rates?

Multiple Choice

a) Notes Payable.

b) Accounts Receivable.

c) Common Shares.

3. If the functional currency of a foreign operation is different than the parent's, functional currency, how are exchange gains and losses to be reported?

Multiple Choice

a) As part of other comprehensive income.

b) As part of the non-controlling interest.

c) As part of the acquisition differential amortization.

4. Which of the following statements is correct?

Multiple Choice

a) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using closing rates.

b) If the functional currency of the foreign operation is the same as the parent's functional currency, the non-monetary items recorded at cost must be translated using closing rates.

c) If the functional currency of the foreign operation is different than the parent's functional currency, the non-monetary items recorded at cost must be translated using average rates.

5. Which one of the following best explains how a hedge accomplishes its object to reduce or eliminate exchange rate risk?

Multiple Choice

a) It creates a new payable to match the foreign currency payable.

b) It eliminates the foreign currency receivable or payable.

c) It creates a new receivable to match the foreign currency payable.

6. What are speculative forward exchange contracts?

Multiple Choice

a) Hopefully used to make a profit for the company.

b) All of the items describe a speculative forward exchange contract.

c) Contracts not tied to other transactions.