QUESTION 9

1. A firm has purchased, for 50,000 FCs, an electric generator from a foreign firm. The exchange rates were 1 FC = $0.90 on the delivery date and 1 FC = $0.76 when the payable was paid. What is the final recorded value of the generator if the two-transaction method is used?

		$38,000
		$40,000
		$45,000
		$50,000

5 points

QUESTION 10

1. Assuming that the functional currency of a foreign subsidiary is not the local currency, which of the following accounts would be re-measured at the historical rate?

		Accounts Payable
		Long-term notes payable
		Land
		Sales Revenue

5 points

QUESTION 11

1. When translating the financial statements of a foreign subsidiary and the local currency is the foreign entity's functional currency, which of the following accounts is typically translated using an average rate for the reporting period?

		Accounts Payable
		Long-term notes payable
		Land
		Sales Revenue

5 points

QUESTION 12

1. For financial accounting purposes, assets of an individual partner contributed to a partnership are recorded by the partnership at

		historical cost
		book value
		fair market value
		lower of cost or market

5 points

QUESTION 13

1. Callie was admitted to the Adams & Beal Partnership four years ago. The partnership has a deficiency at year end for the current year. How could this deficiency be accounted for?

		Use the profit and loss ratios to absorb the deficiency
		Do not account for the loss in the year incurred, it can be offset against income in future years
		Do not account for the loss in the year incurred, it could be offset against income in future years or carried back to offset income in prior years
		Losses are not passed on to individual partners in a partnership