When a credit sale is denominated in a foreign currency, the foreign exchange rate used to record the sale is the current 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 should be the one that exists on the date of the sale as it reflects the true value of the transaction at that point in time. Waiting for a later date to record the transaction could result in loss of accuracy and transparency in the financial statements.

When a Credit Sale Is Denominated in a Foreign Currency