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Terms in this set (37)
Which of the following is NOT currently a cause of fluctuation in foreign exchange rates?
The pegging of a currency to the American (U.S.) dollar
Which of the following statements is correct?
In Canada, the cost of a unit of foreign currency in Canadian dollars is a direct quotation, while the cost in that foreign currency of purchasing one Canadian dollar is referred to as an indirect quotation.
The rate charged by commercial banks for the purchase of any foreign currency (in Canadian dollars) on any given day would be based on which of the following?
The spot rate.
At the balance sheet date, monetary items denominated in a foreign currency should be adjusted to reflect the exchange rate in effect at the:
balance sheet date.
What would be the amount of the foreign exchange gain or loss recorded at the balance sheet date?
A CDN$10 exchange gain.
At what value would CMI record the initial sale to its American distributor?
What is the amount of CMI's foreign exchange gain or loss at year-end?
What is the amount of cash (in Canadian funds) received by CMI on the settlement date?
What is the amount of CMI's foreign exchange gain or loss on February 28th?
What is the total amount of CMI's foreign exchange gain or loss on this transaction?
Which of the following statements accurately describes the manner in which transactions must be translated under IAS 21 The Effects of Changes in Foreign Exchange Rates?
All individual transactions must be translated into the functional currency of the reporting entity.
Which of the following statements is correct?
The historical rate is the exchange rate on the date of the transaction and the closing rate is the exchange rate at the end of the reporting period.
Some gains and losses arising on a revaluation of property plant and equipment are to be included in other comprehensive income. When the asset is measured in a foreign currency, how would exchange differences be treated?
The differences should be included in the calculation of other comprehensive income.
At what amount (in Canadian Dollars) would XYZ record its initial Loan Liability on January 1, 2016?
What is the amount of interest expense (in Canadian Dollars) recorded for 2016?
What is the amount of interest paid (in Canadian Dollars) during 2016?
What is the amount of the foreign exchange gain or loss recognized on the 2016 Income Statement as a result of revaluing the loan payable?
By what amount (in Canadian Dollars) would XYZ have to adjust its Loan Liability on December 31, 2016 as a result of the year's foreign exchange rate fluctuations?
A $5,000 decrease.
What is the amount of interest paid (in Canadian Dollars) during 2017?
What is the amount of interest expense (in Canadian Dollars) recorded for 2017?
What is the amount of foreign exchange gain or loss recognized on the 2017 Income Statement as a result of revaluing the loan payable?
By what amount (in Canadian Dollars) would XYZ have to adjust its Loan Liability on December 31, 2017 as a result of the year's foreign exchange rate fluctuations?
Which of the following would NOT be considered a foreign exchange hedge?
The placement of large amounts of Canadian funds with a bank in Zurich, Switzerland.
Atwhat amount (in Canadian Dollars) would RXN's sale be recorded initially?
What is the amount of RXN's foreign exchange gain or loss prior to its hedge?
A CDN$6,000 loss.
Atwhat amount (in Canadian Dollars) would the forward contract with the bank be recorded, if recorded gross?
How much (in Canadian Dollars) will RXN expect to receive from the bank when its forward contract is settled?
What is the amount of the discount on the forward contract?
Assuming that the accounts receivable balance was not adjusted on December 1, 2017, what adjustment (if any) would be required to RXN's year-end accounts receivable balance?
A CDN$1,500 decrease.
What is the amount of the exchange gain or loss from the recognition of the hedge discount recognized during 2017?
What is the amount of the forward contract in Canadian dollars?
What is the amount of the liability to the bank recorded on the commitment date if the forward contract is recorded using the gross method?
IAS 39 Financial Instruments: Recognition and Measurement on speculative forward exchange contracts requires that the contract be:
revalued at fair value throughout its life with any gains or losses to be taken into income as they occur.
What is the required adjustment to the carrying value of the forward contract at the company's year-end?
Which of the following statements is NOT correct?
The gain or loss on the hedging instrument in a fair value hedge is initially recognized in other comprehensive income and transferred to profit and loss when the hedged item has be revalued for accounting purposes in accordance with IFRS.
In which of the following situations is a gain or loss recorded on a commitment assets or liability which would not otherwise be recorded?
A fair value hedge of a firm commitment.
Which of the following provides the best hedge against exchange variations in the value of a stream of income in a foreign currency where the payments are expected to occur in equal amounts over a period of five years?
Borrowing in the foreign currency with annual repayments equal to the expected annual revenue cash flows.
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