CA Inter P1 · Chapter 13 · Question 7 of 10
Case: The integral foreign branch of Rohan Ltd has trade receivables of USD 12,000 at the year end. The opening rate was ₹80, average rate ₹81.50 and closing rate ₹83 per USD. The receivables are translated at:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹9,96,000
Explanation
Trade receivables are monetary items, which AS 11 requires to be translated at the closing rate. Translated amount = USD 12,000 x ₹83 = ₹9,96,000. Using the average rate (USD 12,000 x 81.50 = 9,78,000) is appropriate only for income and expense items.
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