Note: This Is a Kaplan CPA Review Question

question 26

Multiple Choice

Note: This is a Kaplan CPA Review Question
Sphinx Co. (Sphinx) records its transactions in U.S. dollars. A sale of goods resulted in a receivable denominated in Japanese yen, and a purchase of goods resulted in a payable denominated in Euros. Sphinx recorded a foreign exchange transaction gain on collection of the receivable and an exchange transaction loss on the settlement of the payable. The exchange rates are expressed as so many units of foreign currency to one dollar. Did the number of foreign currency units exchangeable for a dollar increase or decrease between the contract and settlement dates?

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Demand Per Day

The average quantity of a product or service that consumers buy or are expected to buy in a single day.

Mathematical Approaches

Techniques or methods derived from mathematics used to solve problems and make decisions in various fields.

Optimizing

The process of making something as effective, perfect, or functional as possible within given constraints.

Heuristic

This term refers to a practical approach to problem-solving, learning, or discovery that employs a practical method not guaranteed to be optimal but sufficient for reaching an immediate goal.