Practice prompt · Q:statement-presentation-comprehensive-income-and-disclosure/practice-translation

Classify a translation adjustment

Classify a foreign operation translation adjustment.

Updated Sep 13, 2026 Review due Dec 13, 2026

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A foreign operation’s financial statements produce a translation adjustment that the applicable rule sends to OCI. Which statement is correct?

Choose the best answer. a The adjustment is a dividend b The adjustment enters OCI rather than net income in this period c The adjustment is always customer revenue d The adjustment enters net income because no cash changed hands

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Answer: b

The stated rule controls this item’s reporting path. A generic cash or realization test does not.