A decrease in the direct rate of US$1 to A$# results in:
A) an increase in US$ amount for a payable in A$.
B) a decrease in A$ amount for a payable in US$.
C) an exchange loss.
D) an increase in A$ amount for receivable in US$.

Question

Quizplus · Accepted Answer

A decrease in the direct rate of US$1 to A$# means that it will cost less A$ to buy 1 US$. Therefore, for a payable in US$, the amount payable in A$ will decrease.

A Decrease in the Direct Rate of US$1 to A