When a US-Based Company Holds a Receivable Denominated in a Foreign Currency

question 36

Multiple Choice

When a U.S.-based company holds a receivable denominated in a foreign currency, the U.S. company wants the foreign currency to ________ against the U.S. dollar so that the foreign currency can be converted into ________.

• A)weaken; fewer dollars
• B)weaken; more dollars
• C)strengthen; fewer dollars
• D)strengthen; more dollars

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Definitions:

Enter Bill

The process of recording an invoice received from a vendor or supplier into the accounting system.

Merchandise Company

A business entity primarily engaged in the retail or wholesale buying and selling of goods for profit.

Opening Adjusting Entry

An entry made in the books at the beginning of an accounting period to adjust the balances of accounts from the previous period, ensuring accurate and up-to-date financial records.

Opening Balance Equity

An account used in accounting to balance the books when starting a new company file or reconciling accounts.