t information I- In accordance with ASC 810, a consolidated balance sheet would presen relating to investment in subsidiaries. False True 2- Under U.S. GAAP, foreign exchange losses should be recorded by debiting transaction loss account True False 3- Under the equity method, the investment in Subsidiary account is debited when the investee reports net income. True False 4- The process of converting foreign subsidiary financial statements into the home currency is known as transferring. True False 5-Lara, Inc. owns 80% of Tara, Inc. During the year just ended, Lara sold goods with a 40% gross profit to Tara. Tara sold all of these goods during the year. In its consolidated financial statements for the year, how should the summation of Lara and Tara income statement items be adjusted: A) Sales and cost ofgoods sold should be reduced by 80% of the inter-company sales B) Net income should be reduced by 80% of the gross profit on inter-company sales C) No adjustment is necessary. D) None of the above C) Decroasos in boh reteined esings and the non-controlling interes 0) A decresse in retained cunings and no effect on the mon covardling iner 2. Translation adjustment vesulting frem trasslation process is discloped on the A) A separte component of stockholders' equity B) A below-the -line item on the income seatomem C) An adjustment to retained camings D) A par of income from operations on the income stanemem. 8- What is the definition of "reporting cury A) The prinmary curreney used by the parent company chat minimizes the translation adjustment on the consolidaned financial 8) The currency C) The currency in which the subsidiary does its financial reporting. D) The primary currency used by the subsidiary 9- Consolidated financial statements present all of the following except the A) Individual assets and liabilities of the parent company, B) Individual assets and liabilities of the subsidiary C) Total revenues and expenses of the subsidiary. ) All of these are presented in consolidated financial statements. Page t information I- In accordance with ASC 810, a consolidated balance sheet would presen relating to investment in subsidiaries. False True 2- Under U.S. GAAP, foreign exchange losses should be recorded by debiting transaction loss account True False 3- Under the equity method, the investment in Subsidiary account is debited when the investee reports net income. True False 4- The process of converting foreign subsidiary financial statements into the home currency is known as transferring. True False 5-Lara, Inc. owns 80% of Tara, Inc. During the year just ended, Lara sold goods with a 40% gross profit to Tara. Tara sold all of these goods during the year. In its consolidated financial statements for the year, how should the summation of Lara and Tara income statement items be adjusted: A) Sales and cost ofgoods sold should be reduced by 80% of the inter-company sales B) Net income should be reduced by 80% of the gross profit on inter-company sales C) No adjustment is necessary. D) None of the above C) Decroasos in boh reteined esings and the non-controlling interes 0) A decresse in retained cunings and no effect on the mon covardling iner 2. Translation adjustment vesulting frem trasslation process is discloped on the A) A separte component of stockholders' equity B) A below-the -line item on the income seatomem C) An adjustment to retained camings D) A par of income from operations on the income stanemem. 8- What is the definition of "reporting cury A) The prinmary curreney used by the parent company chat minimizes the translation adjustment on the consolidaned financial 8) The currency C) The currency in which the subsidiary does its financial reporting. D) The primary currency used by the subsidiary 9- Consolidated financial statements present all of the following except the A) Individual assets and liabilities of the parent company, B) Individual assets and liabilities of the subsidiary C) Total revenues and expenses of the subsidiary. ) All of these are presented in consolidated financial statements. Page