A U.S. company sells merchandise to customers in Hong Kong. The merchandise is priced in Hong Kong dollars, and customers generally take 15 days to pay for the merchandise. The U.S. company's sales revenue for these sales, reported on its income statement, is expressed in U.S. dollars converted at:

Question

Quizplus · Accepted Answer

The correct answer is B) The rate when the sales were made. According to accounting principles, transactions in foreign currencies should be recorded at the exchange rate prevailing on the date of the transaction. For sales, this is the date when the sales were made.

A US Company Sells Merchandise to Customers in Hong Kong