If the British Subsidiary of a European Firm Has Net

question 39

Multiple Choice

If the British subsidiary of a European firm has net exposed assets of £250,000, and the pound drops in value from €1.40/£ to euro 1.30/£, the European firm has a translation ________.

• A)gain of €12,500
• B)loss of €12,500
• C)loss of £12,500
• D)gain of £12,500

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Definitions:

T Account

A visual representation of a ledger account that displays both the debit and credit sides to track the balance of financial transactions.

Chronological Order

Organizing events or actions by the order in which they occurred in time.

Error Location

The process or act of identifying the specific spot within a data set, document, or system where a mistake or discrepancy has occurred.

Journal

A log where every financial transaction is first recorded in the order of occurrence.