Windsor Enterprises,a Subsidiary of Kennedy Company Based in New York,reported

question 38

Multiple Choice

Windsor Enterprises,a subsidiary of Kennedy Company based in New York,reported the following information at the end of its first year of operations (all in British pounds) : assets--338,000;expenses--360,000;liabilities--101,000;capital stock--80;000,revenues--517,000.Relevant exchange rates are as follows: As a result of the translation process,what amount is recorded on the financial statements as the translation adjustment?

• A) $26,280 debit adjustment
• B) $26,280 credit adjustment
• C) $6,280 credit adjustment
• D) $6,280 debit adjustment

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Definitions:

Bad Debt Expense

An expense recorded to account for receivables that are not expected to be collected, reflecting credit losses in the financial statements.

Accounts Receivable

Outstanding payments from customers for goods or services a company has already delivered.

Average Collection Period

The average number of days it takes for a business to receive payments from its customers for invoices issued, indicative of the effectiveness of a company's credit and collection policies.

Net Sales

The amount of sales generated by a company after deductions for returns, allowances for damaged or missing goods, and discounts.