Foreign Exchange Gains and Losses on Foreign Currency Transactions

question 56

Multiple Choice

Foreign exchange gains and losses on foreign currency transactions

• A) must be recognized in income in the period in which the rate changes.
• B) are deferred until the monetary part of the transaction is settled.
• C) can be used to adjust the cost of the foreign currency transaction under the temporal but not the current rate method.
• D) can be written off over the life of the debt according to Statement 52, according to the current rate method.

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Definitions:

Natural Resources

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Theodore Roosevelt

The 26th President of the United States (1901-1909), known for his energetic personality, range of interests and achievements, progressive reforms in business and labor, and vigorous foreign policy, including the Panama Canal construction.

Woodrow Wilson

The 28th President of the United States, serving from 1913 to 1921, who led the country through World War I and crafted the League of Nations concept.

World War I

A global conflict that lasted from 1914 to 1918, involving many of the world's great powers, and marked by trench warfare and massive casualties.