If a USCompany Purchases Inventory on Account for $32,000 Euros from a from a British

question 15

Multiple Choice

If a U.S.Company purchases inventory on account for $32,000 euros from a British Company when the exchange rate is $1 to $1.28 euros, how would the U.S.Company recognize the inventory and the accounts payable?

• A)​inventory of $32,000 and accounts payable of $32,000
• B)​inventory of $25,000 and accounts payable of $32,000 with a $7,000 foreign currency loss
• C)​inventory of $25,000 and accounts payable of $25,000
• D)​inventory of $32,000 and accounts payable of $25,000 with a $7,000 foreign currency gain

---

Definitions:

Acceptance

In contract law, the affirmative response by an offeree to an offer, leading to the formation of a contract.

Counteroffer

A response to an offer in which the original offer is rejected and a new offer is proposed in its place.

Article 2

A section of the Uniform Commercial Code that governs sales of goods in the United States.

Firm Offer

in commercial law refers to a binding proposal made by a seller to sell goods or services at a specified price, which cannot be withdrawn for a certain period.