What is the effect of fluctuations in exchange rates on accounts payable?
A)Deferred and amortized.
B)Recognized immediately in income.
C)Recognized if losses, deferred if gains.
D)Deferred to maturity.

Question

Quizplus · Accepted Answer

Fluctuations in exchange rates affect accounts payable by requiring immediate recognition in the income statement. This is because changes in exchange rates can lead to gains or losses in the value of foreign currency-denominated payables, which must be accounted for in the period they occur to accurately reflect the company's financial position.

What Is the Effect of Fluctuations in Exchange Rates on Accounts