If a U.S.company is preparing a journal entry for a recent purchase,foreign-currency-denominated purchases must be measured in ________ at the purchase date using the foreign currency ________ rate on the purchase date.
A)foreign currency; spot
B)foreign currency; future
C)U.S.dollars; forward
D)U.S.dollars; spot

Question

Quizplus · Accepted Answer

Foreign-currency-denominated purchases must be measured in U.S. dollars at the purchase date using the foreign currency spot rate on the purchase date. This is because the spot rate reflects the current exchange rate at which the currency can be exchanged on the purchase date, ensuring the transaction is recorded at its accurate value in U.S. dollars.

If a USCompany Is Preparing a Journal Entry for a Recent Purchase,foreign-Currency-Denominated