Multiple Choice
On December 1, 2010, Smith Company delivered a shipment of goods to a Danish customer for a price of 160,000 euros. If on that date 1.3 U.S. dollars could be exchanged for 1 euro. If Smith closes its books on December 31 and 1 U.S. dollar is trading for 1 euro at that time, the adjusting entry that Smith would record would include:
A) a credit to Exchange Rate Gain for $48,000.
B) a debit to Accounts Receivable for $20,800.
C) a debit to Exchange Rate Loss for $48,000.
D) a debit to Sales for $48,000.
Correct Answer:
Verified
Correct Answer:
Verified
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