The Average Rates in Effect for 2010 and 2011 Were

question 39

Multiple Choice

The average rates in effect for 2010 and 2011 were as follows: What is the amount of foreign exchange gain or loss recognized on the 2011 Income Statement as a result of revaluing the loan payable?

• A) $2,500 loss.
• B) $800 loss.
• C) $800 gain.
• D) $2,500 gain.

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Definitions:

Government Policies

Actions and principles that a government follows or implements to achieve certain goals in the country's social, economic, and foreign affairs.

Extra Profit

Additional earnings that exceed the normal expected profit from business activities.

Rent-Seeking Behavior

Actions by individuals or firms aimed at manipulating the political or economic environment to acquire unearned income or profits.

Principal-Agent Problem

A conflict in priorities between a person or group making decisions on behalf of others (agent) and those who are affected by those decisions (principal).