A Net Liability Balance Sheet Exposure Exists and the Foreign

question 27

Multiple Choice

A net liability balance sheet exposure exists and the foreign currency appreciates. Which of the following statements is true?

• A) There is no translation adjustment.
• B) There is a transaction loss.
• C) There is a transaction gain.
• D) There is a negative translation adjustment.
• E) There is a positive translation adjustment.

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Definitions:

Major Product

The primary product of a chemical reaction that is formed in the greatest quantity compared to other products.

Phthalic Acid

An aromatic dicarboxylic acid, with formula C6H4(CO2H)2, it is used as a precursor to other chemicals such as dyes, perfumes, and plastics.

Acid Derivative

A compound obtained by replacing one or more of the hydroxyl groups of an acid with an organic group.

Anhydride

A compound formed from the removal of water molecules between two carboxylic acid molecules.