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Basic Question 2 of 4
Which of the following statements about the accounts receivable turnover ratio is true in a period of an appreciating local currency and the use of the current rate method?
B. The current rate method results in a higher accounts receivable turnover ratio than the temporal method.
C. The accounts receivable turnover ratio is the same under either method.
A. The current rate method results in a lower accounts receivable turnover ratio than the temporal method.
B. The current rate method results in a higher accounts receivable turnover ratio than the temporal method.
C. The accounts receivable turnover ratio is the same under either method.
User Contributed Comments 2
| User | Comment |
|---|---|
| bananabun2 | i thought they said all assets and liabilities as translated at current rate? How come AR is translated at average rate? |
| danlan2 | AR is translated at current rate. |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
analyze how alternative translation methods for subsidiaries operating in hyperinflationary economies affect financial statements and ratios.
CFA® 2025 Level II Curriculum, Volume 2, Module 12.