CA Inter P1 · Chapter 13 · Question 5 of 10
Under AS 11, in translating the financial statements of a non-integral foreign operation, assets and liabilities (both monetary and non-monetary) are translated at:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The closing rate
Explanation
For a non-integral foreign operation, AS 11 requires all assets and liabilities, monetary and non-monetary, to be translated at the closing rate, while income and expense items are translated at exchange rates at the dates of the transactions (an average rate may be used as an approximation). The resulting differences go to the foreign currency translation reserve.
More Accounting for Branches including Foreign Branches MCQs
- Q7Case: 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…
- Q8Which of the following indicates that a foreign branch of Sujal Ltd is an integral foreign operation under AS 11?
- Q9Case: Under the debtors system, Tanmay Ltd maintains a Branch Account. Branch data at cost: opening stock ₹40,000, opening debtors…
- Q10Case: Under the stock and debtors system, goods are invoiced to the branch of Udit Ltd at cost plus 20% and sold at invoice price. At…
- Q1Case: Manav Ltd sends goods to its branch at cost plus 25%. During the year, goods invoiced at ₹5,00,000 were sent. The loading included…