XYZ Corporation,with a division located in Germany,must translate its financial statements from euros to U.S.dollars. What is the major issue involved in translation?
A)Most accountants are not conversant in foreign currency exchange.
B)U)S.GAAP may differ from German GAAP.
C)The U.S.dollar has been steadily falling relative to the euro.
D)The resulting balance sheet may not balance.

Question

Quizplus · Accepted Answer

The major issue in translating financial statements from one currency to another is that the resulting balance sheet may not balance due to exchange rate fluctuations affecting the values of assets, liabilities, and equity differently.

XYZ Corporation,with a Division Located in Germany,must Translate Its Financial