Advanced Financial Accounting Exam 2 Flashcards Quizlet PDF

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si ash basis instead of ac crual basis
b. prior period adjustments
c. use of fair (or current) values instead of historical cost
d. recognition of goodwill in situations not involvin...

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10/25/21, 8:31 PM

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

Advanced Financial Accounting Exam 2 Terms in this set (45) If 1 British pound can be

D.

exchanged for 180 cents of U.S. currency, what fraction should be used to compute the indirect quotation of the exchange rate expressed in British pounds? A. 1/180 B. 1/.56 C. 1.8/1 D. 1/1.8

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Based on the information given

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

above, the indirect exchange rates for the Singapore dollar and the Cyprus Pound are: A. 1.7655 Singapore dollars and 1.4235 Cyprus pounds respectively. B. 0.2975 Singapore dollars and 1.5132 Cyprus pounds respectively. C. 2.1622 Singapore dollars and 0.4625 Cyprus pounds respectively. D. 1.4235 Singapore dollars and 0.3979 Cyprus pounds respectively.

Based on the information given

A.

above, how many U.S. dollars must be paid for a purchase of citrus fruits costing 10,000 Cyprus pounds? A. $25,132 B. $15,132 C. $3,979 D. $35,77

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Based on the information given

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

above, how many Singapore dollars are required to purchase goods costing 10,000 US dollars? A. 7,025 B. 14,235 C. 17,655 D. 2,975

Upon arrival in Chile, Karen

A.

exchanged $1,000 of U.S. currency into 4,80,000 Chilean Pesos. While returning after her two month visit, she exchanged her remaining 50,000 Pesos into $100 of U.S. currency. What amount of gain or a loss did Karen experience on the 50,000 pesos she held during her visit and converted to U.S. dollars at the departure date? A. Loss of $4. B. Gain of $4. C. Loss of $6. D. No gain or loss.

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Chicago based Corporation X

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

has a number of importing transactions with companies based in UK. Importing activities result in payables. If the settlement currency is the British Pound, which of the following will happen by changes in the direct or indirect exchange rates?

A. Option A B. Option B C. Option C D. Option

Chicago based Corporation X

D.

has a number of exporting transactions with companies based in Sweden. Exporting activities result in receivables. If the settlement currency is the Swedish Krona, which of the following will happen by changes in the direct or indirect exchange rates? A. Option A B. Option B C. Option C D. Option D

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Corporation X has a number of

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

C.

exporting transactions with companies based in Vietnam. Exporting activities result in receivables. If the settlement currency is the US dollar, which of the following will happen by changes in the direct or indirect exchange rates? A. Option A B. Option B C. Option C D. Option D

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Mint Corporation has several

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. On October 1, 2008, Mint purchased confectionary items from a foreign company at a price of LCU 5,000 when the direct exchange rate was 1 LCU = $1.20. The account has not been settled as of December 31, 2008, when the exchange rate has decreased to 1 LCU = $1.10. The foreign exchange gain or loss on Mint's records at year-end for this transaction will be: A. $500 loss B. $500 gain C. $378 gain D. $5,500 loss

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Mint Corporation has several

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. On November 2, 2008, Mint sold confectionary items to a foreign company at a price of LCU 23,000 when the direct exchange rate was 1 LCU = $1.08. The account has not been settled as of December 31, 2008, when the exchange rate has increased to 1 LCU = $1.10. The foreign exchange gain or loss on Mint's records at year-end for this transaction will be: A. $460 loss B. $387 loss C. $387 gain D. $460 gain

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On September 3, 2008, Jackson

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

A.

Corporation purchases goods for a U.S. dollar equivalent of $17,000 from a Swiss company. The transaction is denominated in Swiss francs (SFr). The payment is made on October 10. The exchange rates were: What entry is required to revalue foreign currency payable to U.S. dollar equivalent value on October A. Debit: Foreign Currency Transaction Loss 1000; Credit: Accounts Payable for 1000. B. Debit: Accounts Payable for 850; Credit: Foreign Currency Transaction Gain for 850 C. Debit: Foreign Currency Transaction Loss 850; Credit: Accounts Payable 850 D. Debit: Accounts Payable 1000; Credit Foreign Currency Transaction Gain 1000

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On March 1, 2008, Wilson

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

Corporation sold goods for a U.S. dollar equivalent of $31,000 to a Thai company. The transaction is denominated in Thai bahts. The payment is received on May 10. The exchange rates were: What entry is required to revalue foreign currency payable to U.S. dollar equivalent value on May 10? A. Debit: Accounts Receivable for 93; Credit: Foreign Currency Gain for 93 B. Debit: Accounts Receivable for 3000; and Credit: Foreign Currency Transaction Gain 3000 C. Debit: Foreign Currency Transaction Loss 3000; Credit: Accounts Receivable for 3000 D. Debit: Sales 93; Credit: Foreign Currency Gain 93

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On December 5, 2008, Texas

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

A.

based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 2009. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 2008: 1 Riyal = $.265 December, 31, 2008 1 Riyal = 0262 January 10, 2009 1 Riyal = .264 Based on the preceding information, what journal entry would Imperial make on December 31, 2008, to revalue foreign currency payable to equivalent U.S. dollar value? A. Debit: Accounts Payable 300; Credit: Foreign Currency Transaction Gain 300 B. Debit: Accounts Payable 100; Credit: Foreign Currency Transaction Gain 100 C. Debit: Foreign Currency Transaction Gain Loss 300; Credit: Accounts Payable 300 https://quizlet.com/125931818/advanced-financial-accounting-exam-2-flash-cards/

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D. Debit Foreign Currency Transaction Loss 200; Credit: Accounts Payable 200

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On December 5, 2008, Texas

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 2009. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 2008: 1 Riyal = $.265 December, 31, 2008 1 Riyal = 0262 January 10, 2009 1 Riyal = .264 Based on the preceding information, what journal entry would Imperial make on January 10, 2009, to revalue foreign currency payable to equivalent U.S. dollar value? A. Debit: Accounts Payable 300; Credit: Foreign Currency Transaction Gain 300 B. Debit: Accounts Payable 100; Credit: Foreign Transaction Gain 100 C. Debit: Foreign Transaction Loss 100; Credit: Accounts Payable 100 https://quizlet.com/125931818/advanced-financial-accounting-exam-2-flash-cards/

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D. Debit: Foreign Transaction Loss 200; Credit: Accounts Payable 200

On December 5, 2008, Texas

C.

based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 2009. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 2008: 1 Riyal = $.265 December, 31, 2008 1 Riyal = 0262 January 10, 2009 1 Riyal = .264 Based on the preceding information, what was the overall foreign currency gain or loss on the accounts payable transaction? A. $300 loss B. $200 loss C. $100 gain D. $200 gain

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Spartan Company purchased

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

C.

interior decoration material from Egypt for 100,000 Egyptian pounds on September 5, 2008, with payment due on December 2, 2008. Additionally, on September 5, Spartan acquired a 90-day forward contract to purchase 100,000 Egyptian pounds of E£ = $.1850. The forward contract was acquired to manage the exposed net liability position in Egyptian pounds, but it was not designated as a hedge. The spot rates were: Sept 5, 2008 E = $.1835 Dec 2, 2008 E = $.1865 Based on the preceding information, in the entry made on December 2nd to revalue foreign currency receivable to current equivalent U.S. dollar value, A. Accounts Payable will be debited for $18,350. B. Foreign Currency Units will be debited for $18,500. C. Foreign Currency Transaction Gain will be credited for $150. D. Other Comprehensive https://quizlet.com/125931818/advanced-financial-accounting-exam-2-flash-cards/

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Advanced Financial Accounting Exam 2 Flashcards | Quizlet

Income will be credited for $300.

Spartan Company purchased

C.

interior decoration material from Egypt for 100,000 Egyptian pounds on September 5, 2008, with payment due on December 2, 2008. Additionally, on September 5, Spartan acquired a 90-day forward contract to purchase 100,000 Egyptian pounds of E£ = $.1850. The forward contract was acquired to manage the exposed net liability position in Egyptian pounds, but it was not designated as a hedge. The spot rates were: Sept 5, 2008 E = $.1835 Dec 2, 2008 E = $.1865 A. Debit: A/P 18,800; Credit: FCU 18,800 B. Debit: A/P 18,500; Credit: FCU 18,500 C. Debit: A/P 18,650; Credit: FCU 18,650 D. Debit: A/P 18,350; Credit: FCU 18,350

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Detroit based Auto

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

Corporation, purchased ancillaries from a Japanese firm on December 1, 2008, for 1,000,000 Yen, when the spot rate for Yen was $.0095. On December 31, 2008, the spot rate stood at $.0096. On January 10, 2009 Auto paid 1,000,000 Yen acquired at a rate of $.0094. Auto's income statements should report a foreign exchange gain or loss for the years ended December 31, 2008 and 2008 2009 A. $0 $0 B. $100 Loss $200 Gain C. $0 $100 Gain D. $100 Gain $100 Loss

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On November 1, 2008, Denver

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

C.

Company borrowed 500,000 local currency units (LCU) from a foreign lender evidenced by an interest-bearing note due on November 1, 2009, which is denominated in the currency of the lender. The U.S. dollar equivalent of the note principal was as follows: -7/1/08 (date borrow) 100,000 -12/31/08 (Yr end) 125,000 -7/1/09 (date Repaid) 140,000

In its income statement for 2009, what amount should Denver include as a foreign exchange gain or loss on the note principal? A. 15,000 gain B. 25,000 gain C. 15,000 loss D. 40,000 loss

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Company X denominated a

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

December 1, 2009, purchase of goods in a currency other than its functional currency. The transaction resulted in a payable fixed in terms of the amount of foreign currency, and was paid on the settlement date, January 10, 2010. Exchange rates moved unfavourably at December 31, 2009, resulting in a loss that should: A. be included as a separate component of stockholders' equity at Dec. 31, 2009. B. be included as a component of income from continuing operations for 2009. C. be included as a deferred charge at December 31, 2009. D. not be reported until January 10, 2010, the settlement date.

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Heavy Company sold metal

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

scrap to a Brazilian company for 200,000 Brazilian reals on December 1, 2008, with payment due on January 20, 2009. The exchange rates were: 12/1/08 1 real = .5435 12/31/08 1 real = .5192 1/20/09 1 real = .5305 Based on the preceding information, which of the following is true of dollar's movement vis-à-vis: Brazilian real during the period? 12/1-12/31 1/1-1/20 A. USD down USD Up B. USD down USD down C. USD Up USD Up D. USD Up USD Up

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Heavy Company sold metal

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

scrap to a Brazilian company for 200,000 Brazilian reals on December 1, 2008, with payment due on January 20, 2009. The exchange rates were: 12/1/08 1 real = .5435 12/31/08 1 real = .5192 1/20/09 1 real = .5305 Based on the preceding information, what is the Heavy's overall net gain or net loss from its foreign currency exposure related to this transaction? A. $4,860 loss B. $2,600 loss C. $7,120 gain D. $2,260 gain

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My Myway Company sold

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

equipment to a Canadian company for 100,000 Canadian dollars (C$) on January 1, 2009 with settlement to be in 60 days. On the same date, Alman entered into a 60-day forward contract to sell 100,000 Canadian dollars at a forward rate of 1 C$ = $.94 in order to manage its exposed foreign currency receivable. The forward contract is not designated as a hedge. The spot rates were: 1/1 C$ = .945 3/1 C$ = .930 Based on the preceding information, the entry to revalue foreign currency payable to current U.S. dollar value on March 1 will have: A. a credit to Foreign Currency Transaction Gain for $1,500. B. a debit to Foreign Currency Transaction Loss for $2,500. C. a debit to Foreign Currency Transaction Loss for $1,500. D. a credit to Foreign Currency Transaction Gain for $1,000.

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My Myway Company sold

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

C.

equipment to a Canadian company for 100,000 Canadian dollars (C$) on January 1, 2009 with settlement to be in 60 days. On the same date, Alman entered into a 60-day forward contract to sell 100,000 Canadian dollars at a forward rate of 1 C$ = $.94 in order to manage its exposed foreign currency receivable. The forward contract is not designated as a hedge. The spot rates were: 1/1 C$ = .945 3/1 C$ = .930 Based on the preceding information, what is the overall effect on net income of Myway's use of the forward My exchange contract? A. Net loss of $1,000 B. Net gain of $1,500 C. Net loss of $500 D. No effect

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My Myway Company sold

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

D.

equipment to a Canadian company for 100,000 Canadian dollars (C$) on January 1, 2009 with settlement to be in 60 days. On the same date, Alman entered into a 60-day forward contract to sell 100,000 Canadian dollars at a forward rate of 1 C$ = $.94 in order to manage its exposed foreign currency receivable. The forward contract is not designated as a hedge. The spot rates were: 1/1 C$ = .945 3/1 C$ = .930 Based on the preceding information, had My Myway not used the forward exchange contract, net income for the year would have: A. increased by $1,000. B. increased by $500. C. decreased by $1,000. D. decreased by $1,500.

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Levin company entered into a

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

forward contract to speculate in the foreign currency. It sold 100,000 foreign currency units under a contract dated November 1, 2008, for delivery on January 31, 11/1/2008 Spot Rate .035 30 Day FWRD .034 90 Day FWRD .033 12/31/2008 Spot Rate .037 30 Day FWRD .036 90 Day FWRD .035

2009: In its income statement for the year ended December 31, 2008, what amount of loss should Levin report from this forward contract? A. $0 B. $300 C. $200 D. $10

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Taste Bits Inc. purchased

Advanced Financial Accounting Exam 2 Flashcards | Quizlet

B.

chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1, 2008. Payment is due on January 30, 2009. On December 1, 2008, the company also entered into a 60day forward contract to purchase 100,000 ...