Taste Bits Inc

question 60

Multiple Choice

Taste Bits Inc. purchased chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1, 20X8. Payment is due on January 30, 20X9. On December 1, 20X8, the company also entered into a 60-day forward contract to purchase 100,000 Swiss francs. The forward contract is not designated as a hedge. The rates were as follows:

-Based on the preceding information,the entries on January 30,20X9,include a:

• A) Credit to Foreign Currency Units (SFr), $184,000.
• B) Credit to Cash, $180,000.
• C) Debit to Foreign Currency Transaction Loss, $4,000.
• D) Debit to Dollars Payable to Exchange Broker, $184,000.

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Definitions:

Reflexes

Automatic, involuntary responses to certain stimuli that serve protective roles, such as the knee-jerk reflex.

Chemical Messenger

Substances in the body such as hormones and neurotransmitters that transmit signals from one cell to another.

Mood

A temporary state of emotion or feeling that can influence an individual's perception, behavior, and well-being.

Sleep

Periodic, natural loss of consciousness—as distinct from unconsciousness resulting from a coma, general anesthesia, or hibernation.