4. Katie analyzes the dollar-based consolidated financial statements of a company that owns a foreign subsidiary. Katie observes that the foreign subsidiary’s sales increased by 24% compared to last year. Katie should be aware that the results Multiple Choice a) will be lower if the currency rate increased during the reporting period. b) will be same if she recalculates the sales trend using the consolidated revenue. c) may differ if she bases the calculation on the foreign currency. d) are verifiable using the foreign currency rate in effect at the end of the year.
4. Katie analyzes the dollar-based consolidated financial statements of a company that owns a foreign subsidiary. Katie observes that the foreign subsidiary’s sales increased by 24% compared to last year. Katie should be aware that the results Multiple Choice a) will be lower if the currency rate increased during the reporting period. b) will be same if she recalculates the sales trend using the consolidated revenue. c) may differ if she bases the calculation on the foreign currency. d) are verifiable using the foreign currency rate in effect at the end of the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4. Katie analyzes the dollar-based consolidated financial statements of a company that owns a foreign subsidiary. Katie observes that the foreign subsidiary’s sales increased by 24% compared to last year. Katie should be aware that the results
Multiple Choice
a) will be lower if the currency rate increased during the reporting period.
b) will be same if she recalculates the sales trend using the consolidated revenue.
c) may differ if she bases the calculation on the foreign currency.
d) are verifiable using the foreign currency rate in effect at the end of the year.
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