Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 12

CompuTech is a U.S.-based multinational corporation. Foreign sales are made at prices set in U.S. dollars, but foreign purchases are often made at prices slated in foreign currencies. If the exchange rate for the U.S. dollar has risen against most foreign currencies throughout the year, would CompuTech have recognized primarily gains or losses as a result of exchange rate fluctuations? Explain.