How Should U

question 45

Multiple Choice

How should U.S.companies record receivables and payables from international trade that are denominated in foreign currencies?

• A)All assets and liabilities of U.S.companies must be recorded in U.S.dollars.
• B)Conservatism would dictate that liabilities should be recorded in the currency in which they are payable, but assets should be recorded in U.S.dollars, regardless of what currency will be received.
• C)There should be separate receivable and payable accounts for each currency that is used by the company.
• D)The company should choose any one currency to use for recording receivable and payables so that there is consistency in the accounts.

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Definitions:

Honor

The quality of being honest and having strong moral principles; a sense of moral uprightness.

Consumer Nondurable

Goods that are immediately consumed or have a lifespan of less than three years, such as food and clothing.

Medical Care

Professional services provided by individuals or institutions to individuals for the purpose of maintaining, improving, or managing health.

Gasoline and Oil

Refers to petroleum-based liquid mixtures primarily used as primary fuels in vehicles and industrial machines.