Adv Acc

1. Depreciation is a decrease in the value of its own currency against foreign currencies. Appreciation is the increase in value of its own currency against foreign currencies resulting from the power of attraction between the demand and supply of currency in the foreign exchange market.

2. The current rate method is used when the functional currency and the presentation currency are different. If you imagine that the local currency and the functional currency are the same (so the functional currency is translated into the presentational currency), then the structure of the current rate method makes perfect sense.

LC = FC → PC

The temporal method is used when the functional currency and the local currency are different. If you imagine that the presentational currency and the functional currency are the same (so the local currency is remeasured into the functional currency), then the structure of the temporal method makes perfect sense.

LC → FC = PC

3. A partnership is a business structure in which the owners (partners) share with each other the profits and losses.

How it works/Example:

A partnership is organized to provide for proportional ownership of a company among the partners based on some type of formula or value of investment in the company. Partnerships pass along the profit (and losses) to its owners and offer tax advantages to the company. The partnership, itself, for example, does not incur taxes on its profits before the profits are distributed to the partners. Each partner in the partnership pays taxes on the distributions based on their individual tax rate. At the same time, with the liability shield of a corporation, partners may be exposed to a greater degree of personal liability in a partnership.

Additional forms of partnerships have been developed which limit the extent of partner’s liabilities. Limited partnerships which give partners protection from liability and, at the same time, limit their control of the company. A limited...