Question :
81. The price of one currency stated in terms of another : 1225326
81. The price of one currency stated in terms of another currency is called a(n):
A. Foreign exchange rate.
B. Currency transaction.
C. Historical exchange rate.
D. International conversion rate.
E. Currency rate.
82. All of the following statements relating to accounting for international operations are True except:
A. Foreign exchange gains or losses can occur when accounting for international sales transactions.
B. Gains and losses from foreign exchange transactions are accumulated in the Fair Value Adjustment Account and are reported on the balance sheet.
C. Gains and losses from foreign exchange transactions are accumulated in the Foreign Exchange Gain (or Loss) account.
D. The balance in the Foreign Exchange Gain (or Loss) account is reported on the income statement.
E. Foreign exchange gains or losses can occur when accounting for international purchases transactions.
83. Foreign exchange rates fluctuate due to changes in:
A. Political conditions.
B. Economic conditions.
C. Supply and demand for currencies.
D. Expectations of future events.
E. All of these.
84. The currency in which a company presents its financial statements is known as the:
A. Multinational currency.
B. Price-level-adjusted currency.
C. Specific currency.
D. Reporting currency.
E. Historical cost currency.
85. If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3 Canadian dollars will buy ____ worth of U.S. dollars.
A. $0.2759
B. $0.82777
C. $1.82777
D. $2.48
E. None of these.
86. Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. Breanna Boutique must record a:
A. gain of $39,500.
B. loss of $39,500.
C. gain of $138,000.
D. loss of $138,000.
E. neither a gain nor loss.
87. Rosser Company sold supplies in the amount of 25,000 euros to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Rosser must record a:
A. gain of $9,750.
B. gain of $20,500.
C. loss of $9,750.
D. loss of $20,500.
E. neither a gain nor loss.
88. Select the correct statement from the following:
A. Profit margin reflects a company’s ability to produce net sales from total assets.
B. Total asset turnover reflects the percent of net income in each dollar of net sales.
C. Return on total assets can be separated into gross margin ratio and price-earnings ratio.
D. High returns on total assets are desirable.
E. Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.
89. Doherty Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:
A. 3%
B. 200%
C. 6%
D. 17%
E. 1.5%
90. A company has net income of $250,000, net sales of $2,000,000, and average total assets of $1,500,000. Its return on total assets equals:
A. 12.5%.
B. 13.3%.
C. 16.7%.
D. 75.0%.
E. 600.0%.
