Q74. Having converted all of Kasamatsu’s accounts using the all-current methods, Jameson is curious to compare the difference

between the temporal and all-current methods on balance sheet accounts. The difference in translated fixed assets and long

term debt respectively if Jameson were to use the temporal method rather than the all-current method is:

Fixed Assets     Long-Term Debt

A)       $0               $0

B)      $1620            $121

C)      $1620            $0

答案和详解如下：

Q74. Having converted all of Kasamatsu’s accounts using the all-current methods, Jameson is curious to compare the difference

between the temporal and all-current methods on balance sheet accounts. The difference in translated fixed assets and long

term debt respectively if Jameson were to use the temporal method rather than the all-current method is:

Fixed Assets     Long-Term Debt

A)       $0               $0

B)      $1620            $121

C)      $1620            $0

Correct answer is C)

Fixed assets under the temporal method, are reported at historical translation rates. 486,000 / 100 = $4,860. Under all-current, fixed assets are translated at the current rate (486,000 / 150) = $3,240, a difference of $1,620.

Even though it is a balance sheet account, under the temporal method, long term debt is considered a monetary liability and is translated at the current rate. Under the all-current method, long-term debt is also translated at the current rate, so the difference between the two methods is $0.

thx