Question $17($Mandatory$)(2\mathrm{.}5$ points$)$

Excellent Inc. is located in the U$.$S$.,$ but it has subsidiaries in Japan. When the yen

$6$ depreciates relative to the U$.$S$.$ dollar, what is the direction of the translation adjustment in the stockholder's equity section of the consolidated financial statements?

A$)$ When there is net asset exposure, the translation adjustment will be positive.

B$)$ There will be no adjustment unless the difference between the translated assets and liabilities is realized.

C$)$ The direction of the adjustment is indeterminate based on the information provided.

$21$

D$)$ When there is net liability exposure, the translation adjustment will be positive.