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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. |
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Edward Liu
Learning Outcome Statements
analyze how the current rate method and the temporal method affect financial statements and ratios;
CFA® 2025 Level II Curriculum, Volume 2, Module 12.