- Obligations to pay cash are

Multiple choice question.

either monetary assets or monetary liabilities depending on the amount.

neither monetary assets nor monetary liabilities.

monetary liabilities.

monetary assets.

- For a given translation exposure, the resulting translation adjustment is equal to

Multiple choice question.

the translation exposure times the the exchange rate in effect at the beginning of the period.

the translation exposure times the change in the exchange rate over the period.

the translation exposure times the the average exchange rate for the period.

the translation exposure times the the exchange rate in effect at the end of the period.

- Which of the following would make it permissible to use the average exchange rate to translate income statement accounts rather than translating each transaction separately?

Multiple select question.

When the income statement is comprised of many similar transactions spread over a period.

When using the average exchange rate would not differ materially from translating each transaction separately.

When translating each transaction separately would result in a lower net income for the period.

When using the average exchange rate would result in a lower net income for the period.

Only monetary assets and monetary liabilities are revalued when the exchange rate changes and the resulting gains and losses are

Multiple choice question.

recognized in other comprehensive income.

reported in the income statement.

capitalized in the asset section of the balance sheet.

not recognized.

- Translation exposure is important because it

Multiple choice question.

prevents firms from experiences losses due to exchange rate fluctuations.

insulates firms against exchange rate fluctuations.

impacts the amount of gain or loss that arises over a period.

Under the temporal method, the exchange rate used to convert the revenue or expense amount in the income statement

Multiple choice question.

is the current exchange rate.

is the historical exchange rate.

is the exchange rate that will result in the largest gain.

is the average exchange rate or the period.

Which of the following are monetary assets?

Multiple select question.

Accounts payable

Notes receivable

Cash

Accounts receivable

Notes payable

Under the temporal method, foreign exchange gains and losses are part of

Multiple choice question.

other comprehensive income.

extraordinary items in the income statement.

net income.

current assets.

For a given translation exposure, the resulting translation adjustment is equal to

Multiple choice question.

the translation exposure times the the exchange rate in effect at the beginning of the period.

the translation exposure times the the average exchange rate for the period.

the translation exposure times the the exchange rate in effect at the end of the period.

the translation exposure times the change in the exchange rate over the period.

Select all that apply

Consolidated financial statements that are presented to investors and credits are

Multiple select question.

prepared after translating foreign subsidiaries' financial statements into U.S. dollar.

denominated in the functional currency of the subsidiaries.

denominated in U.S. dollars.

prepared prior to translating foreign subsidiaries' financial statements into U.S. dollars.