A translation adjustment may be necessary when:
A) notes to financial statements are converted from one language to another.
B) foreign currency financial statements are converted to another currency.
C) purchasing goods from a domestic company.
D) hedging foreign currency.

Question

Quizplus · Accepted Answer

A translation adjustment is necessary when foreign currency financial statements are converted to another currency, as it involves adjusting the values to reflect current exchange rates and any differences in accounting standards or practices between the two countries. The other options listed do not necessarily require a translation adjustment.

A Translation Adjustment May Be Necessary When