When the local currency of a foreign subsidiary is the functional currency,the foreign subsidiary's income statement accounts would be converted to U.S.dollars by:
A)translation using historical exchange rates.
B)remeasurement using current exchange rates at the time of statement preparation.
C)translation using average exchange rate for the period.
D)remeasurement using the current exchange rate at the time of statement preparation.

Question

Quizplus · Accepted Answer

When the local currency of a foreign subsidiary is the functional currency, the income statement accounts are typically converted to U.S. dollars using the average exchange rate for the period. This method provides a reasonable approximation of the effects of exchange rate changes over the period in question.

When the Local Currency of a Foreign Subsidiary Is the Functional