1 .		Which exchange rate does the temporal method use to translate monetary assets?     Historical rate   Rate in effect at acquisition   Current rate   Average rate for the year
2 .		In which of the following situations would the dollar likely be considered the functional currency?    Potato Company, a US company, ships goods to Solesto Company, its Mexican subsidiary, which then distributes the goods in Mexico.   Solesto Company, a Mexican subsidiary of a US company, produces and distributes products in Mexico.   Sheek Company, a French subsidiary of a US company, is financed locally and buys French automobile parts to produce cars sold in Mexico.   All of the above.
3 .		The temporal method    is used when the foreign subsidiary’s books are maintained in its functional currency.   reports the effects of exchange rate fluctuations as adjustments to stockholders’ equity.   requires translation of functional currency measurements into the reporting currency.   remeasures monetary assets and liabilities at the current exchange rate.
4 .		The current rate method    reports the effects of exchange rate fluctuations in the income statement.   is used when the foreign subsidiary’s books are maintained in its functional currency.   uses both current and historical exchange rates.   remeasures nonmonetary assets and liabilities at the current exchange rate.
5 .		The financial statements of a Geman subsidiary whose functional currency is the euro would require    translation.   remeasurement.   translation and remeasurement.   neither translation nor remeasurement.
6 .		The financial statements of a German company whose local currency is the euro and whose functional currency is the dollar would require    translation.   remeasurement.   translation and remeasurement.   neither translation nor remeasurement.
7 .		Goodwill on the books of a foreign subsidiary is remeasured using the    weighted-average rate for the year.   current rate.   historical rate.   functional rate.
8 .		When the current rate method is used, sales revenue would be translated using the    weighted-average rate for the year.   current rate.   historical rate.   functional rate.
9 .		Weighted average exchange rates     are used to translated the ending retained earnings balance when the current rate method is used.   are used to translate the ending retained earnings balance when the temporal method is used.   are used to approximate the rate in effect when revenue was earned and expenses were incurred during the accounting period when the current rate method is used.   All of the above are true of average exchange rates.
10 .		When the temporal method is used, expenses    are remeasured at the current rate if they relate to monetary items.   are always remeasured at the weighted average rate for the year.   are remeasured at the historical rate if they relate to non-monetary items   are remeasured at the weighted average rate if they relate to non-monetary items.