For Each of the Following Situations, Select the Best Answer

question 50

Essay

For each of the following situations, select the best answer concerning accounting for foreign currency transactions:
(G) Results in a foreign exchange gain.
(L) Results in a foreign exchange loss.
(N) No foreign exchange gain or loss.
_____1.Export sale by a U.S.company denominated in dollars, foreign currency of buyer appreciates.
_____2.Export sale by a U.S.company denominated in foreign currency, foreign currency of buyer appreciates.
_____3.Import purchase by a U.S.company denominated in foreign currency, foreign currency of buyer appreciates.
_____4.Import purchase by a U.S.company denominated in dollars, foreign currency of buyer appreciates.
_____5.Import purchase by a U.S.company denominated in foreign currency, foreign currency of buyer depreciates.
_____6.Import purchase by a U.S.company denominated in dollars, foreign currency of buyer depreciates.
_____7.Export sale by a U.S.company denominated in dollars, foreign currency of buyer depreciates.
_____8.Export sale by a U.S.company denominated in foreign currency, foreign currency of buyer depreciates.

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Definitions:

Budgeted Purchases

The estimated amount of purchases a company plans to make in a future period, often part of a budgeting process.

Budgeted Ending Inventory

The estimated value or quantity of inventory that a company plans to have on hand at the end of a financial period.

Budgeted Beginning Inventory

The projected inventory level at the start of a period, based on anticipated costs and demand.

Sales Budget

A detailed forecast of a company's sales, outlining expected sales volume and revenues for a specific period.