On August 1,Steffen Computers,Inc

question 52

Multiple Choice

On August 1,Steffen Computers,Inc.purchased thirty computer chips,on account,from a company located in Taiwan for 500,000 Taiwan dollars.On that date the Taiwan dollar is worth $0.040.On September 1,when the Taiwan dollar was worth $0.038,payment was made.The journal entry on September 1 by Steffen Computers,Inc.would include a:

• A)debit to Accounts Payable $19,000.
• B)debit to Foreign-Currency Transaction Loss $1,000.
• C)credit to Foreign-Currency Transaction Gain $1,000.
• D)credit to Cash $20,000.

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Definitions:

Globally

Refers to an action or concept considered or applied worldwide.

Petty Cash

A small amount of cash on hand used for covering minor and incidental expenses in an organization.

Payment

The act of transferring money or its equivalent in exchange for goods or services.

Postage Stamps

Adhesive paper evidence of prepayment for postal services, used to send letters and packages.