If the assets of a foreign operation exceed its liabilities,and the value of the Australian dollar falls relative to the currency of the foreign operations,there will be:
A) A credit to the 'Foreign Currency Translation Reserve' in the consolidated accounts.
B) A debit to the 'Foreign Currency Translation Reserve' in the consolidated accounts.
C) A credit to 'Foreign Currency Translation Revenue in the consolidated accounts.
D) A debit to the 'Foreign Currency Translation Expense in the consolidated accounts.
E) No impact on the consolidated accounts

Question

Quizplus · Accepted Answer

When the Australian dollar falls relative to the foreign currency, the net assets of the foreign operation increase in value when translated back to Australian dollars, resulting in a credit to the 'Foreign Currency Translation Reserve'.

If the Assets of a Foreign Operation Exceed Its Liabilities,and