An American Company Makes a Credit Sale of Goods to a Company

Multiple Choice

An American company makes a credit sale of goods to a company in London for 10,000 British pounds. On the date of sale, the exchange rate was $1.60 per pound. However, on the date payment was received, the exchange rate had risen to $1.70 per pound. As a result, the American company would record

A) an exchange gain of $1,000.
B) an exchange loss of $100.
C) an exchange loss of $1,000.
D) no exchange gain or loss.