What Concept Is Concerned with the Long-Run Effect of Changes

question 90

Multiple Choice

What concept is concerned with the long-run effect of changes in exchange rates on future prices, sales, and costs? 

• A) translation exposure
• B) economic exposure
• C) transaction exposure
• D) risk exposure

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Definitions:

Perpetual System

A method of inventory accounting in which the inventory levels are updated in real-time with each sale or purchase.

Adjusting Entry

Journal entries made at the end of an accounting period to update the accounts for accruals or deferrals that were not previously recorded.

Gross Profit

The financial measure calculated by subtracting the cost of goods sold from revenue, representing the profit a company makes after deducting the costs associated with making and selling its products.

Net Sales

The amount of sales revenue left after deducting sales returns, allowances, and discounts from gross sales.