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 (or payable) denominated in a foreign currency and the amount of dollars received (or paid). This occurs because of changes in exchange rates between the initial recognition of the receivable or payable and the settlement date.

A Transaction Gain or Loss at the Settlement Date Is