Asked by Manuel De Sousa on Jul 08, 2024
Verified
Which of the following statements is correct?
A) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using closing rates.
B) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using average rates.
C) If the functional currency of the foreign operation is different than the parent's functional currency, dividends must be translated using historical rates.
D) If the functional currency of the foreign operation is the same as the parent's functional currency, dividends must be translated using average rates.
Functional Currency
The primary currency of the primary economic environment in which an entity operates, used in preparing its financial statements.
Dividends
Distributions by a company to its shareholders, consisting of a share of the company's profits.
Historical Rates
The exchange rates from past periods used for translating transactions in foreign currencies or financial statements of foreign operations.
- Comprehend the conversion of dividends in operations involving foreign currency.
Verified Answer
Learning Objectives
- Comprehend the conversion of dividends in operations involving foreign currency.
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