The underlying principle of the current/noncurrent method is that assets and liabilities should be translated based on their maturity.
A)Current assets and liabilities are converted at the current exchange rate in effect when the cash flow associated with the asset or liability actually occurred.Noncurrent assets and liabilities are translated at the historical exchange rate that prevailed when the asset was recognized.
B)Current assets and liabilities,which by definition have a maturity of one year or less,are converted at the current exchange rate.Noncurrent assets and liabilities are translated at the historical exchange rate.
C)All assets and liabilities are converted at the current exchange rate.
D)none of the options

Question

Quizplus · Accepted Answer

The current/noncurrent method states that current assets and liabilities (those with a maturity of one year or less) should be converted at the current exchange rate, while noncurrent assets and liabilities should be translated at the historical exchange rate. This approach allows for a more accurate representation of the value of assets and liabilities based on their timing of cash flows. Options A and C both have incorrect statements, while option D does not provide an answer.

The Underlying Principle of the Current/noncurrent Method Is That Assets