When preparing a consolidating statement of cash flows, which of the following statements is false?
A) All operating activity items are translated at an average exchange rate for the period.
B) A change in accounts receivable is translated using the current rate.
C) A change in long-term debt is translated using the historical rate at the date of the change.
D) Dividends paid are translated using the historical rate at the date of the payment.
E) All items follow translation rates used for the balance sheet and the income statement.

Question

Quizplus · Accepted Answer

A change in accounts receivable should be translated using the same exchange rate used for the related revenues or expenses. It should not be translated using the current rate as it would create inconsistencies in the cash flow statement. Therefore, statement B is false.

When Preparing a Consolidating Statement of Cash Flows, Which of the Following