_____ Which of the following statements is correct?
A) The effect of a decrease in the direct exchange rate is always unfavorable under the foreign currency unit of measure approach.
B) The effect of a decrease in the direct exchange rate is always unfavorable under the U.S. dollar unit of measure approach.
C) The effect of an increase in the direct exchange rate is always unfavorable on the assets and favorable on the liabilities.
D) The effect of an increase in the direct exchange rate is always favorable under the current rate method of translation.
E) None of the above.

Question

Quizplus · Accepted Answer

None of the statements are universally correct as the effects of changes in exchange rates depend on specific circumstances, such as the direction of the change and the accounting method used.

_____ Which of the Following Statements Is Correct