An American Company Makes a Credit Sale of Goods to a Company

question 158

Multiple Choice

An American company makes a credit sale of goods to a company in London for 20,000 British pounds.On the date of sale,the exchange rate was $1.60 per pound.However,on the date payment was received,the exchange rate had risen to $1.70 per pound.As a result,the American company would record

• A)an exchange gain of $2,000.
• B)an exchange loss of $200.
• C)an exchange loss of $2,000.
• D)no exchange gain or loss.

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