Using a _________ rate of exchange for all items appearing on the statement of financial position maintains the relationship in the retranslated financial statements (into the presentation currency)as that that existed in the foreign operation's financial statements (using the functional currency).
A)fluctuating
B)constant
C)spot
D)closing

Question

Quizplus · Accepted Answer

Using a constant rate of exchange ensures that the relationship between the items in the statement of financial position remains consistent across reporting periods. This is important for comparative analysis and to accurately reflect the financial position of the foreign operation in the presentation currency. Fluctuating rates, spot rates, or closing rates may not provide the same level of consistency or comparability.

Using a _________ Rate of Exchange for All Items Appearing