What is a subsidiary’s functional currency?a. The parent’s reporting currency.b. The currency used by the parent to acquire the subsidiary.c. The currency in which the entity primarily generates and expends cash.d. Always the currency of the country in which the company has its headquarters.

What is a subsidiary’s functional currency?a. The parent’s reporting currency.b. The currency used by the parent to acquire the subsidiary.c. The currency in which the entity primarily generates and expends cash.d. Always the currency of the country in which the company has its headquarters.

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter8: Subprime Lending Fiasco-ethics Issues

Section: Chapter Questions

Problem 3.12EC

See similar textbooks

Related questions

Q: What accounting issues arise for a company as a result of engaging in international trade

A: The sale and acquisition of goods and services outside of a country's geographical limits are…

Q: Darwin Ltd, an Australian company, acquires a beneficial interest and becomes the Holding company of…

A: Consolidation of foreign subsidiary: The financial statements of foreign subsidiaries is translated…

Q: Read and T for True and F for False of the following phrases: In translating the financial…

A: The answer is false.

Q: How are gains and losses on financial instruments used to hedge the net investment in a foreign…

A: Financial instruments are either tradable assets or can alternatively be thought of as bundles of…

Q: MNC's can capitalize their foreign subsidiaries in many manners, including Group of answer choices…

A: Foreign Subsidiary: Foreign subsidiary companies are any corporations in which a foreign corporation…

Q: Defined by IFRS 2 as a share-based payment transaction in which the entity acquires goods or…

A: The question involves transaction in which the entity acquires goods or services either as…

Q: The Investment in a Subsidiary should be recorded on the parent’s books at the A. Fair value of the…

A: Acquisition: It is a case, when all or majority stocks of a company is purchased by another…

Q: General questions Under GAAP, a parent company should exclude a subsidiary from consolidation if:…

A: (1) Option (4) is the correct answer. Subsidiary company is controlled by the parent company. If the…

Q: Translation exposure results when an MNC translates each subsidiary's financial data to its home…

A: Translation Exposure: When a company's equity, assets, obligations, or income fluctuate in value as…

Q: Which of the following is an example of a transaction where a parent’s ownership interest in a…

A: Transactions that will change the ownership interest in subsidiary but not the controlling…

Q: Which is incorrect concerning the date of exchange in a business combination? * O The acquisition…

A: 1) The acquisition date is the date on which the acquirer effectively obtains control of the…

Q: Recognize the particular accounting challenges connected with combining a foreign subsidiary's…

A: Introduction: A denominated currency is the currency used to resolve a transaction in foreign…

Q: Why is it so difficult to estimate the value of retained profits when translating the financial…

A: Introduction: Retained earnings: Retained earnings are the portion of a company's profits earned but…

Q: Exchange differences arising on a monetary item that forms part of a reporting entity's net…

A: As per IFRS 21 OR PFRS 21 Accounting for foreign currency transactions, Monetary items are units of…

Q: Which of the following nonmonetary exchange transactions may result in recorded gains or losses? A)…

A: Non monetary assets exchange represents swaping of non-monetary assets between two entities.…

Q: Identify and describe the various methods available to a parent company in order to maintain its…

A: Methods available to a parent company in order to maintain its investment in subsidiary account in…

Q: In translating the financial statements of a foreign subsidiary, why is the value assigned to…

A: Balance of retained earnings is created by multitude transactions like gains, losses, expenses,…

Q: An entity’s functional currency is a. the currency of the primary economic environment in which the…

A: Currency is referred as the medium of exchange for which goods and services are exchanged. It is the…

Q: Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its…

A: When the subsidiary company is having branch offices or operations in a country other than the…

Q: Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its…

A: The following C$ financial statements are produced by combing the figures from the main operation…

Q: In preparing consolidated financial statements of a U.S. parent company and a foreign subsidiary,…

A: Ans. While preparing consolidated financial statements of an entity, all the subsidiary entities…

Q: What is a subsidiary’s functional currency? Choose the correcta. The parent’s reporting currency.b.…

A: Definition: Where foreign currency is the primary currency of the foreign entity operating…

Q: ing entity remains the company's performar the parent's financia

A: To find the correct option as,

Q: Paragraph Styies 11-Unifying the currency of the financial statements items for all of the…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Identify the unique accounting issues associated with consolidating a foreign subsidiary with the…

A: In foreign exchange transactions, a denominated currency is a currency that is used to resolve a…

Q: Critically discuss [you are expected to understand whether a subsidiary is the alter ego of the…

A: It has been said that a subsidiary remains a seperate legal entity ,distinct from its holding…

Q: Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its…

A: Consolidated financial statements are a set of financial statements prepared for a group company…

Q: Which one of the following is part of other comprehensive income (OCI)? Multiple Choice Sale of…

A: other comprehensive income (OCI) means those income , expenses , gains and losses which are yet to…

Q: What information about revenues by geographic area should a company present?a. Disclose separately…

A: Revenue: The account which is to be credited when a company receives donated assets is the revenue…

Q: Identify the particular accounting challenges that arise when a foreign subsidiary is consolidated…

A: Introduction: A denominated currency is the currency used to resolve a transaction in foreign…

Q: The investment in subsidiary should be recorded on the parent’s book at?

A: The financial statements are prepared at the end of an accounting year to calculate the financial…

Concept explainers

Goals and Objectives

A goal motivates a person to achieve a desired outcome using the available resources within a specified time limit. Having goals helps a person focus on a specific desire and directs them to achieve it. An objective is a specific action and a measurable process to achieve the desired goal. A goal needs a specific action plan, i.e., an objective, to be accomplished.

Question

What is a subsidiary’s functional currency?
a. The parent’s reporting currency.
b. The currency used by the parent to acquire the subsidiary.
c. The currency in which the entity primarily generates and expends cash.
d. Always the currency of the country in which the company has its headquarters.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Definition

VIEW

Step 2: Explanation

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is a subsidiary’s functional currency? Choose the correcta. The parent’s reporting currency.b. The currency used by the parent to acquire the subsidiary.c. The currency in which the entity primarily generates and expends cash.d. Always the currency of the country in which the company has its headquarters.
15. What is a subsidiary’s functional currency? A. The parent’s reporting currency. B. The currency in which transactions are denominated. C. The currency in which the entity primarily generates and expends cash. D. Always the currency of the country in which the company has its headquarters.
How does a parent company determine the appropriate method for translating the financial statements of a foreign subsidiary?
nee 1. If the foreign subsidiary of a US Corporation uses the currency of the region as its functional currency, which of the following methods would they use and where would gains and losses be reported? A. Remeasurement, Temporal method. Income statement. B. Translation, Current Rate method. Comprehensive income. C. Remeasurement, Temporal method. Comprehensive income. D. Translation, Current Rate method. Income statement 2. If the foreign subsidiary of a US Corp uses US currency as its functional currency, which of the following methods would they use? Where would gains and losses be presented? A. Translation, Current Rate method. Comprehensive Income B. Translation, Current Rate method. Income statement C. Remeasurement, Temporal method. Comprehensive income. D. Remeasurement, Temporal Method. Income Statement
1. For reporting purposes, currencies are defined as Operating, International and presentation Domestic and international Foreign, functional and presentation International and functional 2. The functional currency is Currency in which the entity reports earnings. The currency in which the entity primarily operates. The currency in which the entity presents the financial statements. The currency in which the entity primarily conducts banking activities 3. Which consideration would not be relevant in determining the entity's functional currency? The currency in which receipts from operating activities are retained. The currency in which finance or fund is generated The currency that influences the cost of the entity. The currency that the most internationally acceptable for trading 4. Under IFRS, how is presentation currency defined? The currency in which the financial statements are presented. The currency that uses the current rate The currency of…
Gains from remeasuring a foreign subsidiary’s financial statements from the local currency, which is NOT the functional currency, into the parent company’s currency should be reported as a(n): extraordinary item (net of tax). part of continuing operations. deferred credit. other comprehensive income item.
What information about revenues by geographic area should a company present?a. Disclose separately the amount of sales to unaffiliated customers and the amount of intra-entity sales between geographic areas.b. Disclose as a combined amount sales to unaffiliated customers and intra-entity sales between geographic areas.c. Disclose separately the amount of sales to unaffiliated customers but not the amount of intra-entity sales between geographic areas.d. No disclosure of revenues from foreign operations need be reported.
The functional currency is Currency in which the entity reports earnings. The currency in which the entity primarily operates. Matched quizlet The currency in which the entity presents the financial statements. The currency in which the entity primarily conducts banking activities
Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements.c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.
The two methods for the translation of foreign subsidiary financial statements are the current rate and temporal methods. Briefly, describe how each of these methods translates the foreign subsidiary financial statements into the parent company's consolidated statements. Identify when each technique should be used and the major advantage(s) of each.
Identify and describe the various methods available to a parent company in order to maintain its investment in subsidiary account in its internal records.
Identify the unique accounting issues associated with consolidating a foreign subsidiary with the operations of its U.S. parent company.