A foreign currency transaction is a transaction that is denominated or requires settlement in a foreign currency,including transactions arising when an entity:
A)borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency
B)acquires or disposes of assets,or incurs or settles liabilities,denominated in a foreign currency
C)buys or sells goods or services whose price is denominated in a foreign currency
D)all of the above

Question

Quizplus · Accepted Answer

All of the options listed involve a foreign currency transaction, as they involve the use of a currency other than the entity's functional currency. Borrowing or lending funds in a foreign currency involves a foreign currency transaction, as the amounts payable or receivable are denominated in a currency other than the entity's functional currency. Acquiring or disposing of assets, or incurring or settling liabilities, in a foreign currency also qualifies as a foreign currency transaction, as the amounts involved are denominated in a currency other than the entity's functional currency. Finally, buying or selling goods or services whose price is denominated in a foreign currency is a foreign currency transaction, as the transaction involves the use of a currency other than the entity's functional currency.

A Foreign Currency Transaction Is a Transaction That Is Denominated