International Accounting Chapter 6 With Complete
Questions And Correct Verified Answers
The price at which the foreign currency can be acquired is known as
______. - (ANSWERS)foreign exchange rate
The value of the currency is allowed to fluctuate freely according to market
forces, with little or no intervention from the central bank. Which exchange
rate mechanism is it? - (ANSWERS)independent float
The exchange rate between the euro and the U.S. dollar on January 15, Year
1 is EUR/USD 0.867. This is the direct quote for ______. -
(ANSWERS)EUR
If the forward rate of a foreign currency (1 Australian dollar = $0.8)
exceeds the spot rate (1 Australian dollar = $0.7) on a given date, the
foreign currency is sold at ______. - (ANSWERS)premium
Select the best answer to complete the following statement: "A foreign
currency option gives the holder of the option ______ to trade foreign
currency in the future." - (ANSWERS)the right but not the obligation
True or false: A variety of factors determine the exchange rate between two
currencies. The exchange rate fluctuates. - (ANSWERS)True
Salisbury Trade Inc. Is a U.S. corporation, buys goods from a Chinese
company with payment to be made in U.S. dollars. Which type of exposure
to foreign exchange risk does Salisbury Trade Inc. Have? - (ANSWERS)No
exposure to foreign exchange risk
,International Accounting Chapter 6 With Complete
Questions And Correct Verified Answers
Which country pegs their currency to U.S. dollar? - (ANSWERS)Hong
Kong, Saudi Arabia, Jordan , Panama, and others
The major issue in accounting for foreign currency transactions is ______. -
(ANSWERS)how to deal with the change in the domestic-currency value
when the foreign currency changes in value
The exchange rate between Japanese yen and the U.S. dollar on May 2,
Year 1 is: USD/JPY 0.0088. This is the indirect quote for ______. -
(ANSWERS)USD
Which method of accounting for changes in the value of a foreign currency
transaction assumes that an export sale is not complete until the foreign
currency receivable has been collected and converted into domestic
currency? - (ANSWERS)The one-transaction perspective
The spot rate for Australian dollar today is US$0.892, and the one-month
forward rate is $0.882. In the one-month forward market, the Australian
dollar is sold at ______. - (ANSWERS)a discount
Which type of option refers to the purchase of foreign currency by the
holder of the option? - (ANSWERS)Call
Eximco is a U.S. exporter, sells goods to a Japanese customer with payment
to be made in Japanese yen. Which type of exposure to foreign exchange
risk does Eximco have? - (ANSWERS)Export sale transaction exposure
, International Accounting Chapter 6 With Complete
Questions And Correct Verified Answers
Select the best answer to complete the following statement: "The major
issue in accounting for foreign currency transactions is how to deal with the
change in the domestic-currency value of the account receivable resulting
from the ______ and the account payable resulting from an ______ when
foreign currency ______ in value." - (ANSWERS)export, import, changes
Select the best answer to complete the following statement: "To avoid the
uncertainty related to foreign exchange rates, companies often use foreign
currency ______ to ______ against the effect of unfavorable changes in the
value of foreign currencies." - (ANSWERS)derivatives, hedge
Which standard(s) require(s) companies to use the deferral approach to
account for unrealized foreign exchange gains and losses? -
(ANSWERS)Neither IFRS or U.S. GAAP
Which IAS provides guidance to account for the effects of changes in
foreign exchange rates? - (ANSWERS)IAS 21
Select the best answer to complete the following statement: "According to
IFRS 9, Financial Instruments, hedging accounting is ______ for those
derivatives used for hedging purposes provided the hedging relationship is
clearly ______, ______, and ______." - (ANSWERS)acceptable, defined,
measurable, actually effective
Under the one-transaction perspective, any change in the domestic currency
value regarding to the foreign currency will be accounted for as an
adjustment to ______. - (ANSWERS)Accounts Receivable and Sales
Questions And Correct Verified Answers
The price at which the foreign currency can be acquired is known as
______. - (ANSWERS)foreign exchange rate
The value of the currency is allowed to fluctuate freely according to market
forces, with little or no intervention from the central bank. Which exchange
rate mechanism is it? - (ANSWERS)independent float
The exchange rate between the euro and the U.S. dollar on January 15, Year
1 is EUR/USD 0.867. This is the direct quote for ______. -
(ANSWERS)EUR
If the forward rate of a foreign currency (1 Australian dollar = $0.8)
exceeds the spot rate (1 Australian dollar = $0.7) on a given date, the
foreign currency is sold at ______. - (ANSWERS)premium
Select the best answer to complete the following statement: "A foreign
currency option gives the holder of the option ______ to trade foreign
currency in the future." - (ANSWERS)the right but not the obligation
True or false: A variety of factors determine the exchange rate between two
currencies. The exchange rate fluctuates. - (ANSWERS)True
Salisbury Trade Inc. Is a U.S. corporation, buys goods from a Chinese
company with payment to be made in U.S. dollars. Which type of exposure
to foreign exchange risk does Salisbury Trade Inc. Have? - (ANSWERS)No
exposure to foreign exchange risk
,International Accounting Chapter 6 With Complete
Questions And Correct Verified Answers
Which country pegs their currency to U.S. dollar? - (ANSWERS)Hong
Kong, Saudi Arabia, Jordan , Panama, and others
The major issue in accounting for foreign currency transactions is ______. -
(ANSWERS)how to deal with the change in the domestic-currency value
when the foreign currency changes in value
The exchange rate between Japanese yen and the U.S. dollar on May 2,
Year 1 is: USD/JPY 0.0088. This is the indirect quote for ______. -
(ANSWERS)USD
Which method of accounting for changes in the value of a foreign currency
transaction assumes that an export sale is not complete until the foreign
currency receivable has been collected and converted into domestic
currency? - (ANSWERS)The one-transaction perspective
The spot rate for Australian dollar today is US$0.892, and the one-month
forward rate is $0.882. In the one-month forward market, the Australian
dollar is sold at ______. - (ANSWERS)a discount
Which type of option refers to the purchase of foreign currency by the
holder of the option? - (ANSWERS)Call
Eximco is a U.S. exporter, sells goods to a Japanese customer with payment
to be made in Japanese yen. Which type of exposure to foreign exchange
risk does Eximco have? - (ANSWERS)Export sale transaction exposure
, International Accounting Chapter 6 With Complete
Questions And Correct Verified Answers
Select the best answer to complete the following statement: "The major
issue in accounting for foreign currency transactions is how to deal with the
change in the domestic-currency value of the account receivable resulting
from the ______ and the account payable resulting from an ______ when
foreign currency ______ in value." - (ANSWERS)export, import, changes
Select the best answer to complete the following statement: "To avoid the
uncertainty related to foreign exchange rates, companies often use foreign
currency ______ to ______ against the effect of unfavorable changes in the
value of foreign currencies." - (ANSWERS)derivatives, hedge
Which standard(s) require(s) companies to use the deferral approach to
account for unrealized foreign exchange gains and losses? -
(ANSWERS)Neither IFRS or U.S. GAAP
Which IAS provides guidance to account for the effects of changes in
foreign exchange rates? - (ANSWERS)IAS 21
Select the best answer to complete the following statement: "According to
IFRS 9, Financial Instruments, hedging accounting is ______ for those
derivatives used for hedging purposes provided the hedging relationship is
clearly ______, ______, and ______." - (ANSWERS)acceptable, defined,
measurable, actually effective
Under the one-transaction perspective, any change in the domestic currency
value regarding to the foreign currency will be accounted for as an
adjustment to ______. - (ANSWERS)Accounts Receivable and Sales
