Questions from International Accounting

Q: Which of the following items is normally translated the same way under

Which of the following items is normally translated the same way under both the current rate and temporal methods of translation? a. Inventory b. Equipment c. Sales revenue d. Depreciation expense

Q: In translating the financial statements of a foreign subsidiary into the parent’s

In translating the financial statements of a foreign subsidiary into the parent’s reporting currency under the current rate method, which of the following statements is true? a. Expenses are translate...

Q: A foreign subsidiary of Wampoa Ltd. has one asset (inventory

A foreign subsidiary of Wampoa Ltd. has one asset (inventory) and no liabilities. The subsidiary operates with a significant degree of autonomy from Wampoa and primarily uses the local currency (the w...

Q: Which of the following best explains how a translation loss arises when

Which of the following best explains how a translation loss arises when the temporal method of translation is used to translate the foreign currency financial statements of a foreign subsidiary? a. Th...

Q: Which method of translation maintains, in the translated financial statements,

Which method of translation maintains, in the translated financial statements, the underlying valuation methods used in the foreign currency financial statements? a. Current rate method; income statem...

Q: Atlanta Tours Company entered into a five-year lease on January

Atlanta Tours Company entered into a five-year lease on January 1, Year 1, with Duck Boats Inc. for a customized duck boat. Duck Boats Inc. will provide a vehicle to Atlanta Tours Company with the wor...

Q: In accordance with U.S. generally accepted accounting principles (

In accordance with U.S. generally accepted accounting principles (GAAP), which translation combination would be appropriate for a foreign operation whose functional currency is the U.S. dollar?

Q: What is treaty shopping?

What is treaty shopping?

Q: The functional currency of Garland Inc.’s Japanese subsidiary is the

The functional currency of Garland Inc.’s Japanese subsidiary is the Japanese yen. Garland borrowed Japanese yen as a partial hedge of its investment in the subsidiary. How should the transaction gain...

Q: In deciding whether to establish a foreign operation, which factor(

In deciding whether to establish a foreign operation, which factor(s) might a multinational corporation (MNC) consider? a. After-tax returns from competing investment locations. b. The tax treatments...