Multiple Choice
_____ Patonics has a long-term intercompany receivable on its books resulting from a loan made to a foreign subsidiary several years ago. No due date is specified inasmuch as settlement is not planned in the foreseeable future. The receivable is denominated in U.S. dollars. During 2006, the U.S. dollar strengthened. Patonics uses the foreign currency unit of measure approach. At 12/31/06, Patonics should
A) Adjust the intercompany receivable downward and debit OCI-Translation Adjustment.
B) Adjust the intercompany receivable downward and debit FX Transaction Loss.
C) Adjust the intercompany receivable downward and debit Investment in Subsidiary.
D) Make no adjustment to the Intercompany Receivable account.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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