Donald Company, a manufacturing company based in San Juan City, Philippines, purchased raw materials from a foreign company denominated in foreign currency. Which of the following is correct? A. If the foreign currency appreciates, Jonald will recognize foreign exchange loss. B. If the foreign currency appreciates, Jonald will recognize foreign exchange gain. C. If the foreign currency depreciates, Jonald will recognize foreign exchange loss. D. Any gain or loss will be deferred until the date of settlement.
Donald Company, a manufacturing company based in San Juan City, Philippines, purchased raw materials from a foreign company denominated in foreign currency. Which of the following is correct? A. If the foreign currency appreciates, Jonald will recognize foreign exchange loss. B. If the foreign currency appreciates, Jonald will recognize foreign exchange gain. C. If the foreign currency depreciates, Jonald will recognize foreign exchange loss. D. Any gain or loss will be deferred until the date of settlement.
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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Donald Company, a manufacturing company based in San Juan City, Philippines, purchased raw materials from a foreign
company denominated in foreign currency. Which of the following is correct?
A. If the foreign currency appreciates, Jonald will recognize foreign exchange loss.
B. If the foreign currency appreciates, Jonald will recognize foreign exchange gain.
C. If the foreign currency
D. Any gain or loss will be deferred until the date of settlement.
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