A Foreign Currency Sale Is Recorded as Revenue, Using the Exchange

question 98

Multiple Choice

A foreign currency sale is recorded as revenue, using the exchange rate:

• A) on the date of the sale.
• B) on the date the balance sheet is consolidated to financial reports.
• C) on a historical average over the period between the sale and the consolidation.
• D) that the company decides to use.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts and prepare the company's books for the next period.

Statement of Income

A report detailing the earnings, expenses, and net profit of a business over a fiscal period, illustrating the financial performance.

Zero Balance

A situation where an account's balance is exactly zero, indicating no funds or no outstanding amount.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for revenues earned, expenses incurred, and depreciation, ensuring the total debits equal the total credits before financial statements are prepared.