Which exchange rates are used for foreign subsidiaries with different functional currencies? Using the following abbreviations, identify which of the below are correct methods for converting inventory.
Year-end rates: YE
Average rates: AR
Historical rates: HR $$\begin{array} { | l | c | c | }
\hline & \text { Temporal } & \text { Current Rate } \
\hline \text { A) } & \text { YE } & \text { AR } \
\hline \text { B) } & \text { HR } & \text { YE } \
\hline \text { C) } & \text { YE } & \text { HR } \
\hline \text { D) } & \text { HR } & \text { HR } \
\hline
\end{array}$$

Question

Which exchange rates are used for foreign subsidiaries with different functional currencies? Using the following abbreviations, identify which of the below are correct methods for converting inventory.
Year-end rates: YE
Average rates: AR
Historical rates: HR $$\begin{array} { | l | c | c | } 
\hline & \text { Temporal } & \text { Current Rate } \
\hline \text { A) } & \text { YE } & \text { AR } \
\hline \text { B) } & \text { HR } & \text { YE } \
\hline \text { C) } & \text { YE } & \text { HR } \
\hline \text { D) } & \text { HR } & \text { HR } \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under the temporal method, inventory is converted using historical rates (HR). Under the current rate method, inventory is converted using year-end rates (YE).

Which Exchange Rates Are Used for Foreign Subsidiaries with Different