Under US GAAP, What Is the Proper Treatment of Unrealized Foreign

question 13

Multiple Choice

Under U.S. GAAP, what is the proper treatment of unrealized foreign exchange losses?

• A) They should be deferred on the Balance Sheet until the cash is paid.
• B) They should not be recognized until cash is received to complete the transaction.
• C) They should be recorded on the Income Statement in the period the exchange rate changes.
• D) They should be deferred on the Balance Sheet until an offsetting foreign exchange gain is realized.

---

Definitions:

Charitable Nonprofits

Organizations that operate for the purpose of providing benefits to the public without seeking profit for private owners or shareholders.

Internal Revenue Service

The federal agency responsible for administering the tax laws of the United States, including the collection of federal income taxes and enforcement of tax regulations.

Charity

An entity established to offer assistance and collect funds for individuals who require support.

Philanthropy

The act of donating money, goods, services, or time to support charitable causes or organizations for the public good.