Which of the following statement is NOT true regarding a foreign currency transaction? a. When a transaction is denominated in a foreign currency (FC) and measured in dollars, changes in exchange rates between the transaction date and the settlement date expose the domestic company to exchange gains or losses. b. If an FC transaction is unsettled at the end of the accounting period, the exchange gains/losses should be accrued. c. When a transaction is denominated and measured in dollars, changes in exchange rates do not expose the domestic company to exchange gains or losses. d. Changes in exchange rates expose the domestic company to exchange gains or losses only when the company purchases goods from a foreign company.
Which of the following statement is NOT true regarding a foreign currency transaction? a. When a transaction is denominated in a foreign currency (FC) and measured in dollars, changes in exchange rates between the transaction date and the settlement date expose the domestic company to exchange gains or losses. b. If an FC transaction is unsettled at the end of the accounting period, the exchange gains/losses should be accrued. c. When a transaction is denominated and measured in dollars, changes in exchange rates do not expose the domestic company to exchange gains or losses. d. Changes in exchange rates expose the domestic company to exchange gains or losses only when the company purchases goods from a foreign company.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Which of the following statement is NOT true regarding a foreign currency transaction?
a. When a transaction is denominated in a foreign currency (FC) and measured in dollars, changes in exchange rates between the transaction date and the settlement date expose the domestic company to exchange gains or losses.
b. If an FC transaction is unsettled at the end of the accounting period, the exchange gains/losses should be accrued.
c. When a transaction is denominated and measured in dollars, changes in exchange rates do not expose the domestic company to exchange gains or losses.
d. Changes in exchange rates expose the domestic company to exchange gains or losses only when the company purchases goods from a foreign company.
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