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Sprint LTE 9:32 AM 11% 36. Which of the following is not a factor that must be considered in determining the functional currency? A) In which currencies does the subsidiary transact sales and ultimately generate its cash? B) In which currencies does the subsidiary purchase labor, materials, and other goods and services and ultimately expend cash? C) In which currencies does the subsidiary obtain its financing? D) In which currency will fluctuations in SUS value be minimized? 37. Which of the following statements is nor true? A) Gains and losses arising from remeasurement are reflected in current income B) Cost of Goods Sold is not computed as the product of the foreign curmency amount C) There is no cumulative translation adjustment arising from the remeasurement D) Remeasurement gains and losses are reflected in Other Comprehensive Income and an exchange rate. process (OCt) 38. Which of the following provides the best definition of afinctional currency? The currency that is the nost useful to companies in order to transact business The currency of the primary economic environment in which the subsidiary operates The currency with the least fluctuation in SUS value None of the above A) B) C) D) 39. Which of the following best describes the accounting for nonmonetary assets liabilities? A) They are reported at their historical cost B) They are reported at market value. C) Declines in market value are recognized, but only if other than temporary D) We recognize decreases in fair value, but not increases 40. Which of the following best describes the accounting for the net investment in a foreign subsidiary A) The net investment in a foreign subsidiary is reported at fair value. B) Companies can hedge the net investment in a foreign subsidiary like any other The net investment in a foreign subsidiary is reported on the consolidated balance sheet at historical cost. C) D) Both A and B are true. 41. Upon the sale of a foreign subsidiary A) the gain or loss on the sale is affected by the balance of the cumulative translation B) the gain or loss on the sale is only reflected in other comprehensive income (OCI) C) the gain or loss on the sale is not affected by the balance of the cumulative D) the equity adjustment account is first adjusted to current market value before the edjustment account not in net income translation adjustment account gain or-loss on sale is recognized

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