When a U.S.company makes a credit sale to an international customer and the sale terms are for payment in a foreign currency,the foreign exchange rate used to record the sale is the exchange rate:
A)Thirty days from the date of sale.
B)At the end of the seller's fiscal year.
C)At the end of the buyer's fiscal year.
D)On the date final payment is made.
E)On the date of the sale.

Question

Quizplus · Accepted Answer

The foreign exchange rate used to record the sale is the exchange rate on the date of the sale, as that is the most accurate and relevant rate to use for the transaction. Waiting 30 days, until the end of the seller or buyer's fiscal year, or until final payment is made could result in using outdated exchange rates that do not reflect the value of the transaction at the time it occurred.

When a UScompany Makes a Credit Sale to an International Customer and Customer