Monetary items and non-monetary items carried at market value are translated into the reporting currency at the rate of exchange in effect on the balance sheet date under:
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A. B. C. D.C
The correct answer is C. Temporal method.
The temporal method is an accounting method used to translate foreign currency financial statements into the reporting currency of a company. It is used when a company has assets and liabilities that are denominated in a foreign currency.
Under the temporal method, monetary items such as cash, accounts receivable, and accounts payable are translated using the exchange rate in effect on the balance sheet date. This is because monetary items are valued at their current market value, which is the exchange rate on the balance sheet date.
Non-monetary items such as inventory and property, plant, and equipment are translated at the exchange rate in effect on the date they were acquired. This is because the value of non-monetary assets is based on historical cost rather than market value.
The dependency method is not a method of foreign currency translation but rather a method of consolidating financial statements when a company has a controlling interest in another company.
The equity method is also not a method of foreign currency translation but rather a method of accounting for investments in which the investor has significant influence but not control over the investee.
The cash inflow/outflow method is a method of cash flow statement preparation that categorizes cash flows into operating, investing, and financing activities. It is not a method of foreign currency translation.
Therefore, the correct answer is C. Temporal method.