Soal Kuis : Akuntansi Keunagan Lanjutan II

Dosen : Dr.Hj. Wiwi Idawati, SE., M.Si.,Ak.,CA., ACPA

Jawablah pertannyaan dibawah ini dengan tepat:

1. A US firm has a Belgian subsidiary that uses the British pound

as its functional currency. Under FASB statement No. 52, the
US dollar from Belgian unit’s point of view will be

a. a foreign currency.
b. its local currency
c. its current rate method currency
d. its reporting currency

2. Selvey Inc. is a completely owned subsidiary of Parsfield

Incorporated a US firm. The country where Selvey operates is
deemed to have a highly inflationary economy under FASB
statement No. 52. Therefore, the functional currency is

a. its reporting currency.

b. its current rate method currency.
c. the US dollar.
d. its local currency.

3. All of the following factors would be used to define a

functional currency, except

a. high volume of intercompany transactions.

b. expenses primarily driven by local factors.
c. financing denominated in local currency.
d. status as a local tax haven for transfer pricing purposes.

4. When the financial statements of a foreign subsidiary one year

after acquisition are consolidated with the parent company,
Retained Earnings is

a. translated at the current exchange rate.

b. remeasured at the current exchange rate.
c. remeasured at the historical exchange rate.
d. None of the above answers is correct.

5. Peachey has a foreign subsidiary, Schrivener Corporation of

Germany, whose functional currency is the euro. On December 31,
19X2, Schrivener has an account receivable denominated in
British pounds. Which one of the following statements is true?

a. Because all accounts of the subsidiary are translated into

US dollars at the current rate, the Account Receivable is
not adjusted on the subsidiary’s books before translation.
b. The Account Receivable is remeasured into the functional
currency and remeasurement obviates translation.
c. The Account Receivable is first adjusted to reflect the
current exchange rates in euros and then translated at the
 current rate into dollars.
d. The Account Receivable is adjusted to euros at the current
exchange rate and any resulting gain or loss is included as
a translation adjustment in the stockholders’ equity
section of the subsidiary’s separate balance sheet.

6. Paskin’s Corporation’s wholly-owned Canadian subsidiary has a

Canadian dollar functional currency. In translating its account
balances into US dollars for reporting purposes, which one of
the following accounts would be translated at historical
exchange rates?

a. Accounts Receivable.
b. Notes Payable.
c. Capital Stock.
d. Retained Earnings.

7. A foreign entity is a subsidiary of a US parent company and has

always used the current rate method to translate its foreign
financial statements on behalf of its parent company. Which one
of the following statements is incorrect?

a. The US dollar will be the functional currency of this

company.
b. Changes in exchange rates between the subsidiary’s country
and the parent’s country are not expected to affect the
foreign entity’s cash flows.
c. Translation adjustments are shown in stockholders’ equity
as increases or decreases in other comprehensive income.
d. Translation adjustments are not shown on the income
statement.

8. The objective of remeasurement is to

a. produce the same results as if the books were maintained in

the currency of the foreign entity’s largest customer.
b. produce the same results as if the books were maintained
solely in the local currency.
c. produce the same results as if the books were maintained
solely in the functional currency.
d. produce the results reflective of the entity’s economics in
the local currency.

9. Which of the following assets and/or liabilities are considered

monetary?

a. Intangible Assets and Plant, Property, and Equipment.

b. Bonds Payable and Common Stock.
c. Cash and Accounts Payable.
d. Notes Receivable and Inventories carried at cost.
10. Which one of the following accounts would be translated at the
historical exchange rate when the local currency is the
functional currency?

a. Deferred Income Taxes.

b. Accumulated Depreciation on Equipment.
c. Prepaid Insurance.
d. Additional paid-in capital.

11. Accounts for uncollectible accounts are converted into US

dollars at

a. historical rates when the US dollar is the functional

currency.
b. current rates only when the US dollar is the functional
currency.
c. historical rates regardless of the functional currency.
d. current rates regardless of the functional currency.

12. Which of the following foreign subsidiary accounts will have

the same value on consolidated financials, regardless of
whether the statements are remeasured or translated?

a. Trademark.
b. Inventory.
c. accounts receivable.
d. Goodwill.

13. Remeasurement exchange gains or losses appear

a. in the continuing operations section of the consolidated

income statement.
b. as an extraordinary item on the consolidated income
statement.
c. as other comprehensive income typically reported in a
statement of stockholders’ equity.
d. as an adjustment to the beginning balance of retained
earnings on the consolidated Statement of retained
earnings.

14. A foreign subsidiary’s accounts receivable balance should be

translated for the consolidated financial statements at

a. the appropriate historical rate.

b. the prior year’s forecast rate.
c. the future rate for the next year.
d. the spot rate at year-end.

15. If a US company wants to hedge a prospective loss in a foreign

entity from a foreign currency fluctuation, which of the
following actions is recommended?

a. The US company should purchase a forward to swap currency

of the foreign entity’s local country for US currency.
b. The US company should purchase a call option to buy
 currency of the foreign entity’s local country.
c. The US company should issue a loan the foreign entity’s
local country.
d. The US company should borrow money in the foreign entity’s
local country.

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