Question #66 - Reading 10 Multinational Operations

Reading: Reading 10 Multinational Operations

PDF File: Reading 10 Multinational Operations.pdf

Page: 38

Status: Unattempted

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

Revenues for 2001 translated into U.S. dollars amount to:

Answer Choices:

A. $6,000,000

B. $7,800,000

C. $6,600,000

Explanation

Under the temporal method, revenues are translated at the average rate during the reporting period. 60,000,000 × 0.11 = $6,600,000

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