Asked by Mostafa Naweto on Jun 05, 2024
Verified
Foreign currency transactions include:
A) sale of goods to a foreign buyer.
B) purchase of goods from a foreign supplier.
C) borrowing from a foreign lender where the loan is denominated in a foreign currency.
D) all of the above.
Foreign Currency Transactions
Transactions involving the exchange of currency from one country (foreign currency) for the currency of another country, requiring adjustments in financial records to reflect exchange rate changes.
Denominated
Specified or expressed in a particular currency or unit of measure.
Foreign Lender
A lender based in a different country from the borrower, often involved in international financing and loans.
- Understand the concept of foreign currency transactions and their inclusion in financial statements.
Verified Answer
- Choice A involves selling goods and receiving payment in a foreign currency.
- Choice B involves purchasing goods and paying for them in a foreign currency.
- Choice C involves borrowing money in a currency that is not the same as the borrower's home currency.
Learning Objectives
- Understand the concept of foreign currency transactions and their inclusion in financial statements.
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