If accounts payable are denominated in foreign currency at balance date, they should be:
A) translated at the spot rate on that day with any difference from related inventory purchase date spot rate being recognized in profit or loss.
B) translated at the average rate over the period from the related inventory purchase date to balance date.
C) translated at the spot rate in effect on the day the related inventory was purchased.
D) translated at the spot rate on that day with any difference from related inventory purchase date spot rate being recognized in other comprehensive income.

Question

Quizplus · Accepted Answer

Accounts payable in foreign currency should be translated at the spot rate on the balance date, with any exchange differences recognized in profit or loss, according to standard accounting practices.

If Accounts Payable Are Denominated in Foreign Currency at Balance