Under the Two Transaction Theory of Treating a Gain on Exchange

question 33

Multiple Choice

Under the two transaction theory of treating a gain on exchange rate changes,how is the gain treated?

• A)As an operating activity
• B)As an investing activity
• C)As a financing activity
• D)As a cost of acquiring assets

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Definitions:

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on their usage.

Selling Price

The price at which a product or service is offered to the buyer.

Direct Labor Cost

The total cost of all labor directly involved in the production of goods or services.

Activity-Based Costing

A financial allocation practice that designates overhead and indirect costs to related products and services, determined by the activities they necessitate.