The main issue in accounting for foreign currency transactions is:
A) how to treat any foreign exchange differences that arise when assets or liabilities are remeasured at the end of the reporting period using the closing rate.
B) how to translate the financial statements of a foreign operation.
C) how to distinguish between denomination currency or settlement currency.
D) how to record transactions with foreign operations.

Question

Quizplus · Accepted Answer

The main issue in accounting for foreign currency transactions is how to treat any foreign exchange differences that arise when assets or liabilities are remeasured at the end of the reporting period using the closing rate. This is because foreign currency transactions involve exchange rate fluctuations, which can create gains or losses that need to be accounted for in the financial statements.

The Main Issue in Accounting for Foreign Currency Transactions Is