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.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter29: International Finance
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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 depreciates, Jonald will recognize foreign exchange loss. 
D. Any gain or loss will be deferred until the date of settlement. 

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