Q8. Wilkins and Hirauye are working on constructing the consolidated statements for Neslarone. They know that after they convert

from Swiss Francs (CHF) to U.S. dollars (USD), they will be left with a foreign currency adjustment that needs to be included on

the financial statements. To convert from CHF to USD, the analysts should use the:

A)   temporal method and they should record the foreign currency adjustment on the income statement.

B)   all-current method and they should record the foreign currency adjustment on the balance sheet.

C)   all-current method and they should record the foreign currency adjustment on the income statement.

Q9. Remeasurement can be described as the following. The translation of:

A)   local currency transactions into the reporting currency.

B)   the functional currency of a subsidiary into a reporting currency.

C)   local currency transactions into the functional currency.

Q10. Which of the following is NOT correct concerning the functional currency?

A)   Remeasurement is the conversion of the functional currency into the reporting currency.

B)   Remeasurement is the translation of local currency transactions into the functional currency.

C)   Translation is the conversion of the functional currency into the reporting currency.

Q11. Which of the following statements regarding the functional currency is FALSE? The functional currency:

A)   is determined by management.

B)   is remeasured into the reporting currency under the temporal method.

C)   is the currency of the primary economic environment in which the foreign subsidiary generates and expends cash.

答案和详解如下：

Q8. Wilkins and Hirauye are working on constructing the consolidated statements for Neslarone. They know that after they convert

from Swiss Francs (CHF) to U.S. dollars (USD), they will be left with a foreign currency adjustment that needs to be included on

the financial statements. To convert from CHF to USD, the analysts should use the:

A)   temporal method and they should record the foreign currency adjustment on the income statement.

B)   all-current method and they should record the foreign currency adjustment on the balance sheet.

C)   all-current method and they should record the foreign currency adjustment on the income statement.

Correct answer is B)

Neslarone is based in Switzerland and generates the majority of its cash in CHF, meaning the local and functional currencies are both CHF. The firm issues financial reports in USD, so the dollar is the reporting currency. The process of converting from the functional currency to the reporting currency is translation and the correct method to use is the all-current method. When using the all-current method, the foreign currency adjustment is recorded in the equity section of the balance sheet.

Q9. Remeasurement can be described as the following. The translation of:

A)   local currency transactions into the reporting currency.

B)   the functional currency of a subsidiary into a reporting currency.

C)   local currency transactions into the functional currency.

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.
Remeasurement is the translation of local currency transactions into the functional currency.

Q10. Which of the following is NOT correct concerning the functional currency?

A)   Remeasurement is the conversion of the functional currency into the reporting currency.

B)   Remeasurement is the translation of local currency transactions into the functional currency.

C)   Translation is the conversion of the functional currency into the reporting currency.

Correct answer is A)

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.
Translation is the conversion of the functional currency into the reporting currency. Remeasurement is the translation of local currency transactions into the functional currency.

Q11. Which of the following statements regarding the functional currency is FALSE? The functional currency:

A)   is determined by management.

B)   is remeasured into the reporting currency under the temporal method.

C)   is the currency of the primary economic environment in which the foreign subsidiary generates and expends cash.

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 local currency is remeasured into the functional currency under the temporal method. The functional currency is translated into the reporting currency using the all-current method.