On January 1,20x4,HB Inc

question 26

Multiple Choice

On January 1,20x4,HB Inc.issued 10,000,000 Euros (€) of bonds payable.The bonds are due on December 31,20X6.Over the life of the bonds,the exchange rates were as follows:

Assume that exchange gains and losses on long-term monetary are recognized in income immediately.What is the exchange gain (loss) recognized in income during 20X5?

• A)$(1,000,000)
• B)$(500,000)
• C)$500,000
• D)$1,000,000

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Definitions:

Recency Errors

A cognitive bias that occurs when the most recent information or experiences have a disproportionate impact on one's memory or evaluation of a situation.

The Halo Effect

A cognitive bias where an observer's overall impression of a person, company, brand, or product influences their feelings and thoughts about that entity's character or properties.

Leniency Errors

A bias in assessment or judgment processes where the evaluator tends to consistently rate others more favorably than warranted.

Interviewer Illusion

A cognitive bias occurring when interviewers overestimate their ability to evaluate interviewees accurately.