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- Rush records its transactions in U.S. dollars. A purchase of goods resulted in a payable denominated in UK pounds, and a sale of goods resulted in a receivable denominated in Euros. Rush recorded a foreign exchange transaction gain on settlement of the UK pound payable and an exchange transaction gain on the collection of the Euros receivable. Did the US dollar weaken or strengthen against those respective currencies? US dollar against the UK Pound US dollar against the Euro weakened А. weakened strengthened weakened В. weakened strengthened strengthened D. strengthenedGrace Co. had a Chinese yuan payable resulting from imports from China and a Mexican peso receivable resulting from exports to Mexico. Grace recorded foreign exchange losses related to both its yuan payable and peso receivable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date?You are given the exchange rate between the U.S. dollar and the Canadian dollar. You are also given the exchange rate between the U.S. dollar and the Mexican peso. What is the name given to the Canadian dollar per Mexican peso exchange rate derived from the information that was provided? A. Swap rate B. Depositary rate C. Forward rate D. London Interbank rate E. Cross-rate
- In accounting for foreign currency transactions, which of the following approaches is used in the United States?a. One-transaction perspective; accrue foreign exchange gains and losses.b. One-transaction perspective; defer foreign exchange gains and losses.c. Two-transaction perspective; defer foreign exchange gains and losses.d. Two-transaction perspective; accrue foreign exchange gains and losses.Choose the correct. In accounting for foreign currency transactions, which of the following approaches is used in the United States?a. One-transaction perspective; accrue foreign exchange gains and losses.b. One-transaction perspective; defer foreign exchange gains and losses.c. Two-transaction perspective; defer foreign exchange gains and losses.d. Two-transaction perspective; accrue foreign exchange gains and losses.Amazing Corporation recorded £1,000,000(pound) in Accounts Receivables for sales to a customer in the U.K. If the company recorded a foreign currency exchange gain on its receivables, it means that the Pound was ___________________ (one word - depreciated or appreciated
- A direct exchange quotation is one in which the exchange rate is quoted O a. For the immediate delivery of currencies exchanged O b. For the future delivery of currencies exchanged O c. In terms of how many units of the domestic currency can be converted into one unit of foreign currency O d. In terms of how many units of the foreign currency can be converted into one unit of domestic currencyWhen exchange rates are quoted as the number of U.S. dollars per unit of foreign currency, it is referred to as a . European terms b . American terms c . spot-market terms d . fixed-exchange termsChoose the correct.Grace Co. had a Chinese yuan payable resulting from imports from China and a Mexican peso receivable resulting from exports to Mexico. Grace recorded foreign exchange losses related to both its yuan payable and peso receivable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date? Yuan Pesoa. Increase Increaseb. Increase Decreasec. Decrease Increased. Decrease Decrease
- Assume that a U.S. company has made three purchases of inventory from three different foreign vendors. One of the purchases is denominated in U.S. dollars, and the other two purchases are denominated in foreign currency, FC-A and FC-B, respectively. Furthermore, between the time of the purchase and payment to the vendor, the U.S. dollar has strengthened relative to FC-A and weakened relative to FC-B.Discuss how exchange rate changes would impact each of the three purchases.The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange rate at the beginning of the year was $1 Euro = $1 U.S. dollar. The current exchange rate is .80 Euros to $1.00. Net Income for the year was zero. How much is the accounting gain/loss due to the exchange rate change? Beginning Balance Sheet: Assets = 3,000 EurosEquity = 1,500 EurosLiabilities = 1,500 Euros $125, gain $375, loss $375, gain $500, loss $500, gainA U.S. company sells a product to a British company with the transaction listed in British pounds. On the date of the sale, the transaction total of $14,500 is billed as £10,000, reflecting an exchange rate of 1.45 (that is, $1.45 per pound). Prepare the entry to record (1) the sale and (2) the receipt of payment in pounds when the exchange rate is 1.35.