Note: This Is a Kaplan CPA Review Question

question 7

Multiple Choice

Note: This is a Kaplan CPA Review Question
On September 1, 20X1, Brady Corp. entered into a foreign exchange contract for speculative purposes by purchasing 50,000 deutsche marks for delivery in 60 days. The rates to exchange $1 for 1 deutsche mark follow:
In its September 30, 20X1 income statement, what amount should Brady report as foreign exchange loss?

• A) $1,000
• B) $2,500
• C) $1,500
• D) $500

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Definitions:

Risky Shift

is a phenomenon where a group collectively agrees on a course of action that is more extreme than they would have decided individually.

Intuitive Leap

A sudden and insightful understanding or solution that occurs without a clear step-by-step process.

Reference Group

A group to which an individual or another group is compared, often influencing the attitudes, behavior, and opinions of individuals.

Saturn Owners Club

A community or association of individuals who own or are enthusiasts of Saturn vehicles, often sharing information, advice, and camaraderie.