hard · Financial Accounting
A firm has a foreign subsidiary whose functional currency is the local currency. At year-end, the translation of the subsidiary's financial statements into the parent's reporting currency (U.S. dollars) results in a 'plug' figure to balance the accounting equation.
Where is this 'plug' reported in the financial statement set?
- In the Investing section of the Statement of Cash Flows
- In Other Comprehensive Income (OCI) as a Cumulative Translation Adjustment (CTA)
- In the Income Statement as a Foreign Exchange Gain or Loss
- Directly in Retained Earnings as a prior-period adjustment
Sign up free to see the explanation and track your rank →
More Financial Accounting practice
- If employees work 8 hours per day, what is the required wage accrual?
- How should the $80 million difference be recorded?
- What is the Quick Ratio (Acid-Test Ratio)?
- What amount of Goodwill should be recorded under ASC 805?
- A customer pays $200 to settle an outstanding Account Receiv… — How does this transaction
- If sales for the period are $300,000, what is the estimated ending inventory at cost using
- What is the effect on the accounting equation on the date of declaration?
- A company repurchases $300,000 of its own stock in the open… — How is this transaction rep