AASB 121 Requires That the Initial Recognition of a Foreign

question 12

Multiple Choice

AASB 121 requires that the initial recognition of a foreign currency transaction be:

• A) In the amount of the foreign currency.
• B) At the closing rate at balance date.
• C) At the rate the currency is expected to be exchanged at on the settlement date for the monetary asset or liability based on the current market price of futures contracts for the relevant foreign currency.
• D) At the spot rate at the date of the transaction.
• E) None of the given answers.

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Definitions:

Overgeneralized

The extension of a rule or conclusion to broader situations than those to which it is applicable.

Groupthink

A psychological phenomenon where the desire for harmony in a decision-making group results in an irrational or dysfunctional decision-making outcome.

Leader

An individual who guides or directs a group towards achieving common goals through influence, vision, and communication.

Critique

The act of evaluating or analyzing something critically, often with an emphasis on identifying its merits and faults.