A transaction gain or loss at the settlement date is:
A)A change in the exchange rate quoted by a foreign exchange trader.
B)Synonymous with the translation of foreign currency financial statements into dollars.
C)The difference between the recorded dollar amount of an account receivable denominated in a foreign currency and the amount of dollars received.
D)The difference between the buying and selling rate quoted by a foreign exchange trader at the settlement date.

Question

Quizplus · Accepted Answer

A transaction gain or loss at the settlement date is the difference between the recorded dollar amount of an account receivable denominated in a foreign currency and the amount of dollars received. This occurs when the exchange rate has changed between the time the transaction was recorded and the settlement date. It is not related to changes in exchange rates quoted by a foreign exchange trader or the translation of financial statements. It also does not involve the buying and selling rates quoted by foreign exchange traders.

A Transaction Gain or Loss at the Settlement Date Is