Which of the following best describes the accounting for a foreign entity requiring translation or remeasurement if the local economy is classified as highly inflationary?
A)The entity's financial statements are first adjusted for inflation and then translated into the domestic currency.
B)The entity's financial statements are first adjusted for inflation and then remeasured into the domestic currency.
C)The unadjusted trial balance is translated if the functional currency is the local currency.
D)The unadjusted trial balance is remeasured regardless of the functional currency.

Question

Quizplus · Accepted Answer

If a foreign subsidiary operates in a highly inflationary economy, the remeasurement method is used.

Which of the Following Best Describes the Accounting for a Foreign