Isn't revenue (sales) considered "average" under the current rate method? MCQ-05646 A foreign subsidiary's...
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Isn't revenue (sales) considered "average" under the current rate method?
MCQ-05646 A foreign subsidiary's functional currency is its local currency, which has not experienced significant inflation. The weighted average exchange rate for the current year would be the appropriate exchange rate for translating: Salaries Sales to expense external customers A. Yes Yes B. Yes No C. No Yes D. No No Explanation Choice "A" is correct. If a foreign subsidiary's local currency is the functional currency and the economy of the foreign entity is not highly inflationary, then the translation (current) method is used to convert the financial statements of the foreign subsidiary from the local/functional currency to the reporting currency. Under the translation (current) method, all income statement items, including salaries expense and sales to external customers, are translated using the weighted average exchange rate for the current year. Choices "B", "C", and "D" are incorrect, per the above
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