Question #36
Reading: Reading 10 Multinational Operations
PDF File: Reading 10 Multinational Operations.pdf
Page: 19
Status: Correct
Correct Answer: A
Question
Which of the following measures is unaffected by the choice between translation under the current rate method and remeasurement under the temporal method?
Answer Choices:
A. Equity
B. Cost of goods sold
C. Tax expense
Explanation
Taxes are converted at the same rate (average rate) under both methods. Equity under the
temporal method is a mixed rate whereas under the current rate method it is at the
current rate. COGS under the temporal method is at the historical rate and under the
current rate method it is at the average rate.