Q1. Which of the following asset or liability values is likely to be the most understated in a hyperinflationary economy if translation occurs under the all-current method? A) Accounts receivable. B) A plant purchased several years ago. C) Dividends payable.
Q2. In a hyperinflationary economy, translation under the all-current method will most likely result in relatively: A) high balance sheet values for long term assets. B) high translation gains. C) low balance sheet values for long term liabilities.
Q3. The temporal method (remeasurement) is preferred to the all-current method (translation) in hyperinflationary economies because remeasurement: A) results in non-monetary asset values that are a better proxy for the economic values of those assets (versus the all-current method). B) is easier than translation to perform under hyperinflation. C) provides better conversions of subsidiary revenues.
Q4. Which translation method should be used under a hyperinflationary economy?
A) Temporal, because all non-monetary accounts are re-measured at the historical rate. B) All-current, because dividends are translated at the rate that applied when they were issued. C) Monetary/non-monetary, because all monetary accounts are translated at the historical rate.
Q5. For a subsidiary in a hyperinflationary economy, the functional currency should be the:
A) Local currency. B) Parent's currency. C) Subsidiary's operating currency.
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发表于 2009-1-20 13:31
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