Question $6($Mandatory$)(1$ point$)$

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According to FASB $14$later updated by FASB $131,$ Segment reporting must include disclosures in the footnotes of the combined financial statements as well as part of$$the MD&A $($management$,$discussion and analysis$).$

Question $6$ options:

TrueFalse

Question $7($Mandatory$)(1$ point$)$

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The overvaluation$$account keeps track of profits for all inventory transferred from Home office to Branch Office while$"$Investment in Branch" and the "Home Office account" will always be exactly the same balance.

Question $7$ options:

TrueFalse

Question $8($Mandatory$)(1$ point$)$

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Combined cash flows can only be prepared after each affiliated subsidiary's cash flows are completed and forwarded to the parent for combination. Once received, the parent will then add all individual companies plus some debit and credit adjustments.

Question $8$ options:

TrueFalse

Question $9($Mandatory$)(1\mathrm{.}5$ points$)$

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Companies choose to use Branches in foreign countries instead of subsidiaries to gain knowledge, avoid being sued, operate without detection, operate without risking its brand name, avoid legal compliance, test the market demand for products$$and sometimes to test the labor market for integrity, skills and knowledge of workforce. In other words, you can operate under the radar for while before you assume more risks.

Question $9$ options:

TrueFalse

Question $10($Mandatory$)(2$ points$)$

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A foreign subsidiary$$operates in a country that uses three different currencies. The currency it chooses to report its financial$$numbers is different than the functional currency of that country. It must be noted also that its functional currency is different than it parent currency, the USD.

Under FAS$52$: The method it must use to convert its foreign financials from local currency to it's reporting currency i$.$e$.,$ from local currecy to functional and then from functional currency to parent reporting currency will be$?$

Question $10$ options:

Current Rate$$for both scenarios.

Current for LC to FC and Temporal for FC to reporting currency.

Current Rate method$$for LC to FC and Current Rate for FC to Reporting Currency.

Temporal for Local Currency to Functional Currency and Current Rate method for Functional Currency$$to Reporting Currency.