A Canadian Subsidiary of a U

question 41

Multiple Choice

A Canadian subsidiary of a U.S. parent firm is instructed to bill an export to the parent in U.S. dollars. The Canadian subsidiary records the accounts receivable in Canadian dollars and notes a profit on the sale of goods. Later, when the U.S. parent pays the subsidiary the contracted U.S. dollar amount, the Canadian dollar has appreciated 10% against the U.S. dollar. In this example, the Canadian subsidiary will record a:

• A) 10% foreign exchange loss on the U.S. dollar accounts receivable.
• B) 10% foreign exchange gain on the U.S. dollar accounts receivable.
• C) Since the Canadian firm is a U.S. subsidiary, neither a gain nor loss will be recorded.
• D) Any gain or loss will be recorded only by the parent firm.

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Definitions:

Mary Whiton Calkins

An American psychologist who was the first woman to serve as the President of the American Psychological Association and a pioneer in memory research.

Wilhelm Wundt

Often referred to as the "father of experimental psychology," he founded the first formal laboratory for psychological research in 1879.

Introspection

The examination of one's own conscious thoughts and feelings, often as a method in psychological research to understand mental states and processes.

Critical Thinking

The disciplined mental process of actively analyzing, synthesizing, and evaluating information to reach conclusions or solve problems.