Cho Co. ,a public Canadian corporation has a subsidiary in South Africa that supplies half of the components that Cho needs for its plant in Alberta.It has been determined that the functional currency of the foreign operations is the Canadian dollar.Which of the following statements is true?
A)The exchange gains and losses on the monetary items will be recognized in net income.
B)The exchange gains and losses on the monetary items will be recognized as other comprehensive income.
C)The cumulative exchange gains and losses will be shown as a separate component of shareholders' equity.
D)The exchange gains and losses on nonmonetary items are deferred.

Question

Quizplus · Accepted Answer

The functional currency of the foreign operations is the Canadian dollar, so the exchange gains and losses on the monetary items will be recognized in net income.

Cho Co ,A Public Canadian Corporation Has a Subsidiary in South