Certain balance sheet accounts of a foreign subsidiary of orchid company have been stated in u. s. dollars as follows:

stated at current rates historical rates

accounts receivable, current $ 215,000 $ 235,000 '

accounts receivable, long term 118,000 125,000

land 59,000 63,000

patents 89,000 94,000

total 481,000 517,000

1. this subsidiary’s functional currency is the u. s. dollar. what total should orchid’s balance sheet include for the preceding items?

2. this subsidiary’s functional currency is foreign currency. what total should orchid’s balance sheet include for the preceding items?

The correct answer is b

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan