Which of the following is not true if the functional currency of a foreign operation is U.S. dollars?
a. All balance sheet items that were carried at current or future exchange prices are translated at the current exchange rate.
b. All balance sheet items carried at past prices are translated at exchange rates existing at the time the item was acquired.
c. All income statement items are translated at the average exchange rate for the reporting period.
d. Exchange gains and losses arising from translation from the currency of record into the functional currency are recognized on the income statement.
ANSWER: C
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Which of the following statements is true regarding period costs?
A) They "attach" themselves to the product. B) They will appear the balance sheet until the product is sold. C) They will appear on the income statement in the year they are incurred. D) They will not impact gross margin or net operating income.
Walter Industries is a family owned concern. It has been using the residual dividend model, but family members who hold a majority of the stock want more cash dividends, even if that means a slower future growth rate. Neither the net income nor the capital structure will change during the coming year as a result of a dividend policy change to the indicated target payout ratio. By how much would the capital budget have to be cut to enable the firm to achieve the new target dividend payout ratio? Do not round intermediate calculations. % Debt41% % Equity = 1.0 - % Debt59% Capital budget under the residual dividend model$5,000,000 Net income; it will not change this year even if dividends increase$3,500,000 Equity to support the capital budget = % Equity × Capital budget$2,950,000
Dividends paid = NI - Equity needed$550,000 Currently projected dividend payout ratio84.3% Target dividend payout ratio75% ? A. -$3,516,949 B. -$4,044,492 C. -$3,727,966 D. -$4,079,661 E. -$2,919,068
Business ethics
A. is laws and regulations that govern business. B. is the application of moral standards to business situations. C. do not vary from one person to another. D. is most important for advertising agencies. E. is well-defined rules for appropriate business behavior.
Which of the following are the recommended percentage groupings of the ABC classifications of the dollar volume of products?
A. A items get 25 percent, B items get 15 percent, and C items get 60 percent. B. A items get 15 percent, B items get 45 percent, and C items get 40 percent. C. A items get 15 percent, B items get 35 percent, and C items get 50 percent. D. A items get 20 percent, B items get 30 percent, and C items get 50 percent. E. A items get 25 percent, B items get 35 percent, and C items get 40 percent.