Taste Bits Inc

question 10

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 200,000 Swiss francs.The forward contract is not designated as a hedge.The rates were as follows:

-Based on the preceding information,the entries on December 31,20X8 related to the forward contract include a:

• A)Credit to Foreign Currency Payable to Exchange Broker,$4,000.
• B)Debit to Foreign Currency Receivable from Exchange Broker,$6,000.
• C)Debit to Foreign Currency Receivable from Exchange Broker,$186,000.
• D)Debit to Foreign Currency Transaction Gain,$4,000.

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Definitions:

Parasympathetic Nervous System

The parasympathetic nervous system is part of the autonomic nervous system responsible for conserving energy and bringing the body to a restful state after periods of stress or danger.

Somatic Nervous System

The part of the peripheral nervous system that handles voluntary control of body movements via skeletal muscles, and conveys sensory and motor information to and from the central nervous system.

Cognitive Appraisal

A mental process through which people evaluate the significance and meaning of events and situations for their well-being.

Richard Lazarus

A psychologist known for his research on stress and emotion, particularly for developing the appraisal theory of stress.