How Should We Recognize the Difference Between the Value of a Receivable

question 41

Multiple Choice

How should we recognize the difference between the value of a receivable in a foreign currency at the time it was recorded and the time the cash was received?

• A)As an adjustment to stockholders' equity
• B)As an adjustment to sales revenue
• C)As an extraordinary gain or loss
• D)As a prior period adjustment

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Definitions:

Order To Cash

A business process that covers the entire order processing system from receipt of an order to the point where the order is fulfilled and payment is received.

Order Cycle

The complete process or time taken from placing an order to the delivery of the product or service to the customer.

Customer Service

The support and guidance given by a business to its customers who purchase or utilize its goods or services.

Logistics

The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption.