Which of the following is a limitation of using the temporal method for translating foreign currency financial statements?
A. The translated asset and liability amounts have no meaningful interpretation.
B. The translation adjustment will usually have a negative impact on income.
C. Financial ratios after translation will be distorted.
D. All of the above are limitations of the temporal method.
Answer:C
Which of the following is a limitation of using the temporal method for translating foreign currency financial statements?
A. The translated asset and liability amounts have no meaningful interpretation. B. The translation adjustment will usually have a negative impact on income. C. Financial ratios after translation will be distorted. D. All of the above are limitations of the temporal method.