Sammy Ltd Hired a US-Based Consultant to Assist with a Major

question 28

Multiple Choice

Sammy Ltd hired a US-based consultant to assist with a major client’s request to improve its internal control system. The consultant’s invoice for US$300,000 was received by Sammy Ltd on 23 June 2000, and paid on 23 July 2000.
Some spot foreign exchanges rates were:
$\begin{array} { l l l l } \text { 23 June 20X0 } & \text { US\$ } 1.00 & = & \text { A\$ } 1.6667 \\\text { 30 June 20X0 } & \text { US\$ } 1.00 & = & \text { A\$ } 1.5385 \\\text { 23 July 20X0 } & \text { US\$ } 1.00 & = & A \$ 1.6128\end{array}$
-Which is the journal entry to record the foreign exchange difference at 30 June 20X0?

• A)\(\begin{array}{lrc}
• \text { Accounts } & \text { Debit } \$ & \text { Credit } \$ \\
• \text { Accounts payable } & 38460 & \\
• \text { Consultant's fees } & & 38460
• \end{array}\)
• B)\(\begin{array}{lrc}
• \text { Accounts payable } &38460 \\
• \text { Revenue - FC exchange difference } &&& 38460 \\
• \end{array}\)
• C)\(\begin{array}{lrc}
• \text { Accounts payable } &&&14999\\
• \text { Consultant's fees } & 14999\\
• \end{array}\)
• D)\(\begin{array}{lrc}
• \text { Accounts payable } &&&14999\\
• \text { Expense - FC exchange difference} & 14999\\
• \end{array}\)

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Definitions:

Senator Albert Beveridge

An American historian and U.S. senator from Indiana, known for his support of American imperialism and expansionism in the early 20th century.

Imperial Expansion

The process by which a state extends its power and dominion, often through the acquisition of territories, usually via colonization or military conquest.

American

Pertaining to the United States of America or its inhabitants.

President Theodore Roosevelt

The 26th President of the United States (1901–1909) known for his progressive policies, strong leadership, and the establishment of national parks.