At the balance sheet date, monetary items denominated in a foreign currency should be adjusted to reflect the exchange rate in effect at the:
A) time of settlement of the contract.
B) time the sale was recorded.
C) balance sheet date.
D)time of payment.

Question

Quizplus · Accepted Answer

According to the accounting standard, monetary items denominated in a foreign currency should be adjusted using the exchange rate in effect at the balance sheet date. This is because the balance sheet reflects the financial position of the entity on that specific date. Using any other date for the exchange rate would not accurately reflect the entity's financial position.

At the Balance Sheet Date, Monetary Items Denominated in a Foreign