Question

Remeasurement, based on the temporal method of conversion, converts foreign currency amounts to reporting currency amounts using different exchange rates for different accounts based on which of the following distinctions?
a. Current and non-current.
b. Monetary and non-monetary.
c. Asset and liability.
d. Income statement and balance sheet.

Answer 1

Answer: B. Monetary and non monetary

Explanation: When remeasurement is done based on the temporal method of conversion, converts foreign currency amounts to reporting currency amounts using different exchange rates for different accounts, it is done base on "Monetary and non monetary* basis.

When we say Monetary it means cash value that will most likely be received when liquidated, like monetary assets having a specific cash value when liquidated. Non-monetary is when the cash value is not fixed and can keep changing as time goes on, like in non monetary assets (assets whom specific cash value that can be received is not fixed and can keep changing as time goes no).