Question

All of the following stockholders' equity accounts of a foreign subsidiary are translated at historical exchange rates except:?

a.retained earnings.
b.common stock.
c.additional paid-in capital.
d.preferred stock.

Answer 1

a.retained earnings.

Step-by-step explanation:

All of the below mentioned accounts are acquired at historical cost and cash benefits do not change for them, as because they are acquired on cost, that is there carrying value is cost and related to amount for which it was acquired, further retained earnings includes the balance of current earnings added, therefore as per rules retained earnings are not converted, on historical conversion rate, and will be converted using current conversion rates of currency.

Final Answer

a.retained earnings.