In: Accounting
5) For each of the following situations, select the best answer concerning accounting for foreign currency transactions:
(G) Results in a foreign exchange gain.
(L) Results in a foreign exchange loss.
(N) No foreign exchange gain or loss.
_____1. Export sale by a U.S. company denominated in dollars, foreign currency of buyer appreciates.
_____2. Export sale by a U.S. company denominated in foreign currency, foreign currency of buyer appreciates.
_____3. Import purchase by a U.S. company denominated in foreign currency, foreign currency of buyer appreciates. _____4. Import purchase by a U.S. company denominated in dollars, foreign currency of buyer appreciates.
_____5. Import purchase by a U.S. company denominated in foreign currency, foreign currency of buyer depreciates. _____6. Import purchase by a U.S. company denominated in dollars, foreign currency of buyer depreciates.
_____7. Export sale by a U.S. company denominated in dollars, foreign currency of buyer depreciates.
_____8. Export sale by a U.S. company denominated in foreign currency, foreign currency of buyer depreciates.
1. Export sale by a U.S. company denominated in dollars, foreign currency of buyer appreciates.--------- No foreign exchange gain or loss.
2. Export sale by a U.S. company denominated in foreign currency, foreign currency of buyer appreciates.----Results in a foreign exchange gain
3. Import purchase by a U.S. company denominated in foreign currency, foreign currency of buyer appreciates. -------Results in a foreign exchange loss
4. Import purchase by a U.S. company denominated in dollars, foreign currency of buyer appreciates.---- No foreign exchange gain or loss.
5. Import purchase by a U.S. company denominated in foreign currency, foreign currency of buyer depreciates. -------Results in a foreign exchange gain
6. Import purchase by a U.S. company denominated in dollars, foreign currency of buyer depreciates.---- No foreign exchange gain or loss.
7. Export sale by a U.S. company denominated in dollars, foreign currency of buyer depreciates.---------- No foreign exchange gain or loss.
8. Export sale by a U.S. company denominated in foreign currency, foreign currency of buyer depreciates.------Results in a foreign exchange loss