Exchange gains and losses on accounts receivable/payable that are denominated in a foreign currency are ________.
A)deferred and reported upon settlement
B)reported as adjustments to the transaction prices
C)reported as equity adjustments from translation
D)recognized in the periods in which exchange rates change

Question

Quizplus · Accepted Answer

Exchange gains and losses on accounts receivable/payable that are denominated in a foreign currency are recognized in the periods in which exchange rates change. This means that any change in exchange rates will result in a gain or loss, and this gain or loss is recognized in the income statement in the period in which it occurs. Therefore, choice D is the correct answer.

Exchange Gains and Losses on Accounts Receivable/payable That Are Denominated