If a USCompany Is Preparing a Journal Entry for a Recent Purchase,foreign-Currency-Denominated

question 25

Multiple Choice

If a U.S.company is preparing a journal entry for a recent purchase,foreign-currency-denominated purchases must be measured in ________ at the purchase date using the foreign currency ________ rate on the purchase date.

• A)foreign currency; spot
• B)foreign currency; future
• C)U.S.dollars; forward
• D)U.S.dollars; spot

---

Definitions:

Outstanding Checks

Checks that have been written and recorded in the cash account but have not yet cleared the bank.

Notes Receivable

A written promise to pay a specific sum of money, with interest, to the holder of the note at a future date.

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Incorrectly Recorded

Incorrectly recorded refers to errors or inaccuracies in financial reporting or data entry, which can impact financial statements and analyses.