Question

1. The Articles of Partnership signed by all partners would supersede standards and rules established by the UPA. True or False. Explain
2. According to U.S. GAAP, when the local currency is the functional currency, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?
   1. The temporal method.
   2. The current rate method.
   3. The current/noncurrent method.
   4. The monetary/nonmonetary method
3. Consolidation Entry A eliminates the subsidiaries Net Asset accounts on the consolidation worksheet.
   1. True
   2. False

Answer 1

Q1 The Articles of Partnership signed by all partners would supersede standards and rules established by the UPA

Ans: False.

Q2 Explain According to U.S. GAAP, when the local currency is the functional currency, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?

Ans: b) The current rate method is used for translating a foreign subsidiary's financial statements into the parent's reporting currency because the current rate method is a method of foreign currency translation where most items in the financial statements are translated at the current exchange rate. When a company has operations in other countries, it may need to exchange the foreign currency earned by those foreign operations into the currency used when preparing the company's financial statements -the presentation currency.

Q3: Consolidation Entry A eliminates the subsidiaries Net Asset accounts on the consolidation worksheet.

Ans: False. It does not eliminate subsidiaries Net Asset accounts rather it includes subsidiaries Net Asset accounts in computing the Total consolidated net assets of the group.