Question #65

Reading: Reading 10 Multinational Operations

PDF File: Reading 10 Multinational Operations.pdf

Page: 38

Status: Unattempted

Correct Answer: A

Part of Context Group: Q65-66 First in Group
Shared Context
- Which of the following statements regarding the current rate method is the most accurate? A) This method is not typically used when the subsidiary is relatively independent of the parent. B) Translation gains and losses are reported in equity. C) Income statements items are translated at the current exchange rate.
Question
The translation gain or loss from the activities of Grande, Inc., should be reported in:
Answer Choices:
A. the statement of shareholder’s equity
B. the statement of cash flows
C. the income statement
Explanation
Under the temporal method, translation gains and losses are included in the income statement.
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