Q16. Which of the following statements is FALSE regarding the use of the temporal method for foreign exchange    

     accounting?

A)   All nonmonetary assets and liabilities are translated at the historical rate of exchange.

B)   Under the temporal method, the foreign exchange gain or loss is placed on the balance sheet in the equity section.

C)   All monetary assets are translated at the current rate of exchange.

Q17. Which of the following statements is NOT a characteristic of the all-current method of accounting for foreign

     currency translation?

A)   All asset accounts are translated at the current rate of exchange as of the balance sheet date.

B)   The common stock account is translated at the rate of exchange that applied when the equity was issued.

C)   Nonmonetary liabilities are translated at the historical rate of exchange.

Q18. Which of the following general statements is most accurate with respect to the all-current method? Revenues:

A)   and operating expenses are translated at the current rate.

B)   and operating expenses are translated at the average rate.

C)   are translated at the average rate while operating expenses are translated at the current rate.

Q19. Which of the following general statements is CORRECT with respect to the temporal method? Revenuesand

     operating expenses (excluding COGS) are translated at the and operating expenses (excluding COGS) are  

     translated at the:

A)   historical rate.

B)   average rate.

C)   current rate.

Q20. Under the all-current method, common stock is translated by using the:

A)   exchange rate as of the balance sheet date.

B)   rate that existed when the equity was issued.

C)   present value of weighted average rate.

答案和详解如下：

Q16. Which of the following statements is FALSE regarding the use of the temporal method for foreign exchange    

     accounting?

A)   All nonmonetary assets and liabilities are translated at the historical rate of exchange.

B)   Under the temporal method, the foreign exchange gain or loss is placed on the balance sheet in the equity section.

C)   All monetary assets are translated at the current rate of exchange.

Correct answer is B)

The basis for using the all current method is when Functional Currency is NOT the same as Parent's Presentation (reporting) Currency. The basis for using the temporal method is when Functional Currency = Parent's Presentation Currency.
Under the temporal method, the foreign exchange gain or loss is placed on the income statement.

Q17. Which of the following statements is NOT a characteristic of the all-current method of accounting for foreign

     currency translation?

A)   All asset accounts are translated at the current rate of exchange as of the balance sheet date.

B)   The common stock account is translated at the rate of exchange that applied when the equity was issued.

C)   Nonmonetary liabilities are translated at the historical rate of exchange.

Correct answer is C)

The basis for using the all current method is when Functional Currency is NOT the same as Parent's Presentation (reporting) Currency. The basis for using the temporal method is when Functional Currency = Parent's Presentation Currency.
Under the current rate method, all liabilities are translated at the current rate of exchange.

Q18. Which of the following general statements is most accurate with respect to the all-current method? Revenues:

A)   and operating expenses are translated at the current rate.

B)   and operating expenses are translated at the average rate.

C)   are translated at the average rate while operating expenses are translated at the current rate.

Correct answer is B)

The basis for using the all current method is when Functional Currency is NOT the same as Parent's Presentation (reporting) Currency. The basis for using the temporal method is when Functional Currency = Parent's Presentation Currency.
As a general rule for the current method (also known as the all-current method), all revenues and operating expenses are translated using the average rate.

Q19. Which of the following general statements is CORRECT with respect to the temporal method? Revenuesand

     operating expenses (excluding COGS) are translated at the and operating expenses (excluding COGS) are  

     translated at the:

A)   historical rate.

B)   average rate.

C)   current rate.

Correct answer is B)

The basis for using the all current method is when Functional Currency is NOT the same as Parent's Presentation (reporting) Currency. The basis for using the temporal method is when Functional Currency = Parent's Presentation Currency.
As a general rule for the temporal method, all revenues and operating expenses (excluding COGS) are translated using the average rate.

Q20. Under the all-current method, common stock is translated by using the:

A)   exchange rate as of the balance sheet date.

B)   rate that existed when the equity was issued.

C)   present value of weighted average rate.

Correct answer is B)

The basis for using the all current method is when Functional Currency is NOT the same as Parent's Presentation (reporting) Currency. The basis for using the temporal method is when Functional Currency = Parent's Presentation Currency.
The historical rate is used.

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