Mint Corporation Has Several Transactions with Foreign Entities

question 62

Multiple Choice

Mint Corporation has several transactions with foreign entities.Each transaction is denominated in the local currency unit of the country in which the foreign entity is located.On November 2,20X8,Mint sold confectionary items to a foreign company at a price of LCU 23,000 when the direct exchange rate was 1 LCU = $1.08.The account has not been settled as of December 31,20X8,when the exchange rate has increased to 1 LCU = $1.10.The foreign exchange gain or loss on Mint's records at year-end for this transaction will be:

• A)$460 loss
• B)$387 loss
• C)$387 gain
• D)$460 gain

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Definitions:

Psychophysics

The branch of psychology that deals with the relationships between physical stimuli and the sensory perceptions they evoke.

Gestalt Principle

A theory in psychology that proposes the human brain sees objects in their entirety before perceiving their individual parts, emphasizing the whole perception.

Proximity

The state of being close or near in space, time, or relationship.

Top-down Processing

A cognitive process that starts with the analysis of high-level information before processing more detailed, sensory data.