For Each of the Following Situations, Select the Best Answer

question 50

Essay

For each of the following situations, select the best answer concerning accounting for foreign currency transactions:
(G) Results in a foreign exchange gain.
(L) Results in a foreign exchange loss.
(N) No foreign exchange gain or loss.
_____1.Export sale by a U.S.company denominated in dollars, foreign currency of buyer appreciates.
_____2.Export sale by a U.S.company denominated in foreign currency, foreign currency of buyer appreciates.
_____3.Import purchase by a U.S.company denominated in foreign currency, foreign currency of buyer appreciates.
_____4.Import purchase by a U.S.company denominated in dollars, foreign currency of buyer appreciates.
_____5.Import purchase by a U.S.company denominated in foreign currency, foreign currency of buyer depreciates.
_____6.Import purchase by a U.S.company denominated in dollars, foreign currency of buyer depreciates.
_____7.Export sale by a U.S.company denominated in dollars, foreign currency of buyer depreciates.
_____8.Export sale by a U.S.company denominated in foreign currency, foreign currency of buyer depreciates.

Prepare journal entries for transactions involving purchases, returns, and payments.

Apply the net method for recording purchases in a periodic inventory system.

Apply the gross method for recording purchases in a periodic inventory system.

Understand the implications of terms such as 2/10, n/30 on transactions.

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Definitions:

Third-Angle Projection

A method of orthographic projection used primarily in the United States, where the object is imagined to be located in the third quadrant.

Decimal-Inch

A unit of measurement used in the United States, where lengths are represented in decimal as opposed to fractions, for precise machined parts or engineering drawings.

Side View

A drawing or projection that represents an object as seen from the side, typically used to show depth or interior features.

Third-Angle Projection

A standard method of orthographic projection where the object is placed in the bottom right quadrant between the projection plane and the observer.