Cash flows from foreign operations denominated in a foreign currency will normally be translated using:
A) historical rates.
B) average rates.
C) closing rates.
D) none of the above.

Question

Quizplus · Accepted Answer

Cash flows from foreign operations denominated in a foreign currency are normally translated using average rates for the period in which the transactions occurred. This approach smooths out any fluctuations in the exchange rate over the period.

Cash Flows from Foreign Operations Denominated in a Foreign Currency