Companies May Operate in Canada, Meaning That Their Offices Are

Multiple Choice

Companies may operate in Canada, meaning that their offices are located in Canada, and their customers are Canadian. However, sometimes companies may decide they are willing to accept payment in a currency other than Canadian dollars. Which of the following statements is FALSE?

A) When a commercial transaction is denominated in another currency, foreign exchange gains and losses are realized.
B) When the books and records of a company are maintained in Canadian dollars, transactions that took place in another currency must be translated into Canadian dollars for inclusion into the records of the company.
C) When a Canadian seller decides to accept payment in Euros for its products, as a result of the accounting records being maintained in Canadian dollars, the Euros need to be converted into Canadian dollars.
D) When a Canadian seller decides to accept payment in Euros for its products, as a result of the accounting records being maintained in Canadian dollars, Euros will be converted to Canadian dollars using the average foreign exchange rate for the month.