The basic advantage of the …….. method of foreign currency translation is that foreign nonmonetary assets are carried at their original cost in the parent's consolidated statement while the most important advantage of the ……… method is that the gain or loss from translation does not pass through the income statement.

A. True

B. False

A. self - sustaining foreign

B. integrated foreign entity

C. foreign

D. none of the above

A. local

B. integrated

C. notational dollar

D. functional

A. size; location

B. a firm's functional currency; location

C. location; foreign subsidiary independence

D. foreign subsidiary independence; a firm's functional currency

A. True

B. False

A. changes in the value of outstanding financial obligations incurred prior to a change in exchange rates.

B. the potential for an increase or decrease in the parent company's net worth and reported net income caused by a change in exchange rates since the last consolidation of international operations.

C. an unexpected change in exchange rates impact on short run expected cash flows.

D. none of the above.