Why Must the Two-Transaction Perspective Be Used for Recording Foreign

question 57

Multiple Choice

Why must the two-transaction perspective be used for recording foreign currency transactions under U.S. GAAP?

• A) The two-transaction perspective is required under IFRS.
• B) U.S. GAAP requires conservatism in financial reporting.
• C) All other methods are excessively complicated to use and therefore obscure the essence of the transaction.
• D) Management made two decisions: one to sell and another to extend credit in a foreign currency.

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Definitions:

Realignment

A significant shift in the political landscape, often characterized by changes in party allegiance, voting patterns, or the emergence of new political issues.

Political Party

An organized group of people with similar political aims and opinions that seeks to influence public policy by getting its candidates elected to public office.

Interest Group

An organization or group that advocates for its members' interests, often in the political realm.

National

Pertaining to or encompassing an entire nation, as opposed to being regional or local; often refers to governmental policies or initiatives at the country-wide level.