200+ câu trắc nghiệm tổng hợp Tài chính công ty đa quốc gia có đáp án - Phần 1

Translation exposure may also be called …….. exposure.

……. exposure is the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last transaction.

Translation exposure measures

According to your authors, the main purpose of translation is

It is possible to use different exchange rates for different line items on a financial statement.

If the same exchange rate were used to remeasure every line on a financial statement, then there would be no imbalances from remeasuring.

Historical exchange rates may be used for …… , while current exchange rates may be used for …...

If an imbalance results from the accounting method used for translation, the imbalance is taken either to…..or …….

Generally speaking, translation methods by country define the translation process as a function of what two factors?

A/an …….subsidiary is one in which the firm operates as an extension of the parent company with cash flows highly interrelated with the parent.

Consider two different foreign subsidiaries of Georgia-Pacific Wood Products Inc. The first subsidiary mills trees in Canada and ships its entire product to the Georgia-Pacific U.S. The second subsidiary is also owned by the parent firm but is located in Japan and retails tropical hardwood furniture that it buys from many different sources. The first subsidiary is likely a/an………foreign entity with most of its cash flows in U.S. dollars, and the second subsidiary is more of a/an ……..foreign entity.

A foreign subsidiary's ………currency is the currency used in the firm's day-to-day operations.

The ………determines accounting policy for U.S. firms.

The two basic methods for the translation of foreign subsidiary financial statements are the…….method and the …….. method.

Exchange rate imbalances that are passed through the balance sheet affect a firm's reported income, but imbalances transferred to the income statement do not.

Which of the following is NOT an economic indicator used by FASB for determining a subsidiary's functional currency?

The current rate method is the most prevalent method today for the translation of financial statements.

The temporal rate method is the most prevalent method today for the translation of financial statements.

Gains or losses caused by translation adjustments when using the current rate method are reported separately on the…….. .

The biggest advantage of the current rate method of reporting translation adjustments is the fact that the gain or loss goes directly to the reserve account on the consolidated balance sheet and does not pass through the consolidated income statement.

Under the current rate method, specific assets and liabilities are translated at exchange rates consistent with the timing of the item's creation.

Under the temporal rate method, specific assets and liabilities are translated at exchange rates consistent with the timing of the item's creation.

The basic advantage of the …….. method of foreign currency translation is that foreign nonmonetary assets are carried at their original cost in the parent's consolidated statement while the most important advantage of the ……… method is that the gain or loss from translation does not pass through the income statement.

The current rate method of foreign currency translation gains or losses resulting from remeasurement are carried directly to current consolidated income and thus introduces volatility to consolidated earnings.

The temporal method of foreign currency translation gains or losses resulting from remeasurement are carried directly to current consolidated income and thus introduces volatility to consolidated earnings.

Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in U.S. dollars,

Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the local currency is the functional currency, then

Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in the local currency, and the U.S. dollar is the functional currency, then

A major problem for international foreign currency transaction is that FASB and the International Accounting Standards Committee (IASC. do NOT use the same basic translation procedure.

The main technique to minimize translation exposure is called a/an …….. hedge.