Under AASB 121 the Effects of Changes in Foreign Exchange

question 21

Multiple Choice

Under AASB 121 The Effects of Changes in Foreign Exchange Rates,an entity must disclose which of the following items in particular?
I.The amount of exchange differences included in profit or loss of the period.
II.The amount of the exchange difference included directly in share capital during the period.
III.Whether a change in the functional currency has occurred.
IV.The reason for using a presentation currency that is different from the functional currency.

• A)I,II,III and IV
• B)II and III only
• C)I,III and IV only
• D)I and IV only

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Definitions:

Allowance for Doubtful Accounts

A contra-account reducing accounts receivable to reflect the estimated portion that may not be collected.

Uncollectibles

Debts owed to a company that are considered unlikely to be paid and are therefore written off as a loss.

Income Statement Approach

A method to prepare the bad debt expense by estimating uncollectible accounts at the end of each period based on expected losses.

Accounts Receivable

Represents the money owed to a company by its customers for goods or services delivered on credit.