Question : 55. Samson Corporation buys a foreign currency future contract as a : 1229479

55. Samson Corporation buys a foreign currency future contract as a hedging strategy to protect against possible losses from fluctuations in a particular foreign exchange. This strategy suggests that Samson Corporation has: 
A. Foreign accounts payable and expects the exchange rate to fall.
B. Foreign accounts receivable and expects the exchange rate to rise.
C. Foreign accounts payable and expects the exchange rate to rise.
D. Foreign accounts receivable and expects the exchange rate to fall.

56. “Convergence” means abandoning a country’s financial reporting standards and replacing them with: 
A. International Accounting Standards.
B. International Financial Accounting Standards.
C. Generally Accepted Accounting Principles.
D. Securities and Exchange Commission Principles.

57. Gains and losses from fluctuations in exchange rates on transactions carried out in a foreign currency are reported in: 
A. The balance sheet, as an adjustment to stockholders’ equity.
B. The income statement.
C. The footnotes to the financial statements.
D. The statement of retained earnings.

58. A contract giving the right to receive a specified quantity of foreign currency at a future date is known as: 
A. Hedging.
B. Exchange rates.
C. Maquilladora.
D. Future contracts.

59. Under the Foreign Corrupt Practices Act, American business firms are required to: 
A. Refuse to transact business in countries that sanction official corruption.
B. Report all bribery attempts to the International Monetary Fund and World Bank.
C. Maintain an adequate system of internal control limiting access to company assets to authorized personnel.
D. Maintain a list of all personnel employed by the company during the last 10 years.

In a recent financial journal, the exchange rate between the dollar and the British pound was quoted in two ways:
 

60. The number of pounds equal to $50,000 on this date is: 
A. 31,250.
B. 80,000.
C. 32,500.
D. Depends upon whether the item is a receivable or a payable.

61. The number of dollars equivalent to ?50,000 on this date is: 
A. 31,250.
B. 80,000.
C. 32,500.
D. Depends upon whether the item is a receivable or a payable.

In a recent financial journal, the exchange rate between the dollar and the Japanese yen (?) was quoted two ways:
 

62. The number of Japanese yen equivalent to $40,000 on this date is: (rounded to whole ?) 
A. ?3,056,000.
B. ?5,235,602.
C. ?5,245,745.
D. Depends upon whether the item is a receivable or a payable.

63. The number of dollars equivalent to ?5,250,000 on this date is: 
A. $40,110.00.
B. $687,172.50.
C. $87,225.50.
D. Depends upon whether the item is a receivable or a payable.

64. Walblue imports a desk from a French manufacturer for sale in its chain of U.S. stores. The cost of a desk to Walblue is 3,700 euros (€). What is the dollar cost of one of these desks if the exchange rate is currently 1.117 euros per U.S. dollar? (round to nearest cent) 
A. $1,117.00.
B. $4,132.90.
C. $3,312.44.
D. $3,700.00.