What Is the Correct Way to Calculate the Dollar Price

question 30

Multiple Choice

What is the correct way to calculate the dollar price of a British car,if we know the price of the car in British pounds and we also know the British per dollar exchange rate?

• A) Dollar price of British car = (Price of British car in pounds) (Exchange rate).
• B) Dollar price of British car = (Price of British car in pounds) / (Exchange rate).
• C) Dollar price of British car = (Price of British car in pounds) / ( 1/Exchange rate).
• D) Dollar price of British car = (Exchange rate) / (Price of British car in pounds).

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Definitions:

Contra Asset Account

An asset account where its balance is a negative figure that is subtracted from the balance of its related accounts on the balance sheet.

Estimated Inventory Returns

An accounting estimation of goods that will be returned by customers or cannot be sold, affecting inventory valuation on the balance sheet.

Expense Account

An account that tracks the costs incurred by a company in its operational activities.

Asset Account

An asset account is a category in accounting that represents resources owned or controlled by a company that have future economic value.