When translating foreign currency items into the functional currency, monetary items are translated at the
A) the weighted average exchange rate for the reporting period.
B) spot exchange rate at the end of the reporting period (closing rate).
C) the historical rate at which monetary items were acquired.
D) the rate that reflects the economic reason for acquiring monetary items.

Question

Quizplus · Accepted Answer

Monetary items are translated at the spot exchange rate at the end of the reporting period (closing rate) because their value is fixed in terms of the amount of currency required to settle the item, and the closing rate provides the most current value.

When Translating Foreign Currency Items into the Functional Currency, Monetary