1 if 1 5625 can be exchanged for 1 british pound 358780

1. If $1.5625 can be exchanged for 1 British pound, the direct and indirect exchange rate quotations are:

(a) $1.5625 and 1 British pound, respectively

(b) $1.5625 and 0.64 British pounds, respectively

(c) $1.00 and 1.5625 British pounds, respectively

(d) $1.00 and 0.64 British pounds, respectively

2. A U.S. firm purchases merchandise from a Canadian firm with payment due in 60 days and denominated in Canadian dollars. The U.S. firm will report an exchange gain or loss on settlement if the transaction is:

(a) Recorded in U.S. dollars

(b) Measured in U.S. dollars

(c) Not hedged through a forward contract

(d) Settled after an exchange rate change has occurred

3. Exchange gains and losses on accounts receivable and payable that are denominated in a foreign currency are:

(a) Accumulated and reported upon settlement

(b) Deferred and treated as transaction price adjustments

(c) Reported as equity adjustments from translation

(d) Recognized in the periods in which exchange rates change