Question

1) The current rate method translates almost all line items from the foreign subsidiary to the parent consolidated statements at the current exchange rate. This is the most commonly used method in the world today.   True     or         False

2) With the current rate method, gains or losses do not go through the income statement and do not increase the volatility of net income. This is perhaps the biggest advantage to using the current rate method.   True     or         False​​​​​​​

3) Executive financial memos are written to contain detailed cost information accurate to the penny.   True     or         False​​​​​​​

Answer 1

1) The current rate method translates almost all line items from the foreign subsidiary to the parent consolidated statements at the current exchange rate. This is the most commonly used method in the world today.   

Answer : True

2) With the current rate method, gains or losses do not go through the income statement and do not increase the volatility of net income. This is perhaps the biggest advantage to using the current rate method.

Answer : True