Assume That Barun Agrees to Purchase US$500,000 for C$550,000 on January

question 68

Multiple Choice

Assume that Barun agrees to purchase US$500,000 for C$550,000 on January 15,2013.The exchange rate at year end is US$1 = C$0.95 and the January 15,2013 exchange rate is US$1 = C$0.97.What journal entry is required at Jan 15,2013?

• A)$10,000 gain.
• B)$10,000 loss.
• C)$75,000 gain.
• D)$75,000 loss.

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Definitions:

Adjusting Process

A procedure in accounting that is carried out at the end of an accounting period to update the accounts and ensure they accurately reflect the financial activities and status of a business.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its loss of value over time.

Depreciation Expense

The orderly division of a tangible asset's expense over its operational life.

Asset Ownership

The legal rights and interests a person or entity has in tangible and intangible items of value.