I have an assignment where, Can you please go through the MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question: ( There are twenty questions need to be answered) :

1) What is the primary difference between a cash flow hedge and a fair value hedge?

A) The fair value hedge must completely offset the variability in the cash flow from the foreign currency receivable or payable.

B) The cash flow hedge can only be used to offset potential foreign currency losses on accounts receivable.

C) The cash flow hedge must completely offset the variability in cash flow from the foreign currency receivable or payable. D) The fair value hedge can only be used to offset the variability in cash flow from longterm fixed assets related to foreign currency fluctuations.

2) On 1 January, 2015, Hikers Inc., a U.S.-based company, borrowed 200,000 on a two-year note at a per annum interest of 4.5%. The spot rate on this day was $1.65 per pound. The spot rate on 31 December, 2015, was $1.64 per pound. The journal entries to account for this foreign currency borrowing will include:

A) a debit to Cash for $200,000 on January 1, 2015.

B) a credit to Notes Payable for $330,000 on December 31, 2015.

C) a debit to Foreign Exchange Loss for $90 on December 31, 2015.

D) a debit to Interest Expense for $14,760 on December 31, 2015

3) What is "hedge accounting?"

A) Any record keeping related to purchase, sale, or valuation of derivatives.

B) Recording options and other derivatives on the Balance Sheet.

C) Matching gains or losses from hedging with losses or gains from the risk being hedged.

D) Using multiple accounting methods to offset the effect of foreign currency exchange.

4) On May 1, 2001, Ustar purchased a put option to sell 50,000 on April 30, 2002 at a strike price equal to $2, which was the spot rate on May 1, 2001. Ustar paid a premium of $0.01 per pound. How should the option be recorded on May 1, 2001? A) Debit Foreign Currency Option for $100,500.

B) Credit Foreign Currency Option for $100,500.

C) Debit Foreign Currency Option for $500.

D) Debit Hedge Expense for $500.

5) Under U.S. GAAP, what is the proper treatment of unrealized foreign exchange gains?

A) They should be deferred on the Balance Sheet until cash is received.

B) The principle of conservatism requires that they should never be recognized.

C) They should not be recorded until cash is received and the exchange transaction is completed.

D) They should be recognized in income on the date the exchange rate changes.

6) Amazing Corporation, a U.S. enterprise, sold product to a customer in Wales on October 1, 20x1 for 100,000 with payment required on April 1, 20x2. Relevant exchange rates are: Spot rate Forward rate (to 4/1/x2) October 1, 20x1 $1.87 $1.85 December 31, 20x1 1.85 $1.84 April 1, 20x2 1.90

The discount factor corresponding to the company's incremental borrowing rate for 6 months is 0.95. Assuming that Amazing Corporation does not hedge this transaction, what is the amount of exchange gain or loss that it should show on its December 31, 2001 income statement?

A) Loss $1,000

B) Loss $2,000

C) Gain $1,000

D) Gain $1,900

7) What is a "foreign exchange rate?"

A) The price to buy a foreign currency

B) The price to buy foreign goods

C) The difference between the price of goods in a foreign currency and the price in a domestic currency

D) The cost to hold all monetary assets in a single currency

8) What is meant by the "translation" of foreign currency financial statements?

A) Converting financial statements prepared under foreign GAAP into domestic GAAP

B) Converting financial statements of a foreign currency into a domestic currency

C) Converting the language used in financial statements from foreign to domestic

D) Converting historic cost financial statements into current cost financial statements

9) Non-monetary assets DO NOT include:

A) fixed assets.

B) inventory.

C) accounts receivable.

D) customer deposits.

10) Homeko, Inc. is located in the U.S., but it has subsidiaries in Germany. When the euro appreciates relative to the U.S. dollar, what is the direction of the translation adjustment to consolidate Homeko's financial statements?

A) When there is net asset exposure, the translation adjustment will be positive.

B) When there is net liability exposure, the translation adjustment will be positive.

C) The direction of the adjustment is indeterminate.

D) There will be no adjustment necessary unless the difference is realized.

11) A Danish subsidiary of a U.S. corporation recorded a building it purchased in 2020 for 100,000,000 krone, when the exchange rate was $0.132/krone. The current exchange rate is $0.163/krone. Under the temporal method, how should the translated amount of the restated asset be interpreted?

A) The U.S. parent would have to pay $16,300,000 to acquire the building today.

B) The U.S. parent would have had to pay $13,200,000 to acquire the building in 2020.

C) The building is worth $13,200,000 to the U.S. parent today.

D) None of the above

12) A Danish subsidiary of a U.S. corporation recorded a building it purchased in 2020 for 100,000,000 krone, when the exchange rate was $0.132/krone. The current exchange rate is $0.163/krone. Under the current rate method, how should the translated amount of the restated asset be interpreted?

A) The U.S. parent would have to pay $16,300,000 to acquire the building today.

B) The U.S. parent would have had to pay $13,200,000 to acquire the building in 2020.

C) The building is worth $13,200,000 to the U.S. parent today.

D) None of the above

13) Placo Ltd., a Scottish subsidiary of Limko, Inc., a U.S. company, showed cost of goods sold on its income statement for the year ended December 31, 2010. Inventory, 1/1/10 100,000 Purchases 900,000 Cost of Goods Available for sale 1,000,000 Inventory, 12/31/10 200,000 Cost of Goods Sold 800,000 Exchange rates/ December 31, 2010 $0.522 December 31, 2009 $0.560 2010 average $0.547 What amount should be used to consolidate Placo's cost of goods sold into Limko's income statement under the temporal method?

A) $443,900

B) $437,600

C) $432,500

D) $448,000

14) Under FASB ASC 830, Foreign Currency Matters, what is the definition of "functional currency?"

A) The primary currency used by the parent company

B) The currency that minimizes the translation adjustment on the consolidated financial statements

C) The currency in which the subsidiary does its financial reporting

D) The primary currency of the foreign entity's operating environment

15) A plan for next year expressed in quantitative terms is referred to as:

A) strategy.

B) capital budget.

C) operating budget.

D) management control system.

16) Influencing subordinates to behave in accordance with the goals and objectives of the organization is referred to as:

A) performance evaluation.

B) management control.

C) strategic planning.

D) goal congruence.

17) What is the role of accounting in formulating strategy?

A) Quantifying opportunities and threats

B) Preparing budgets

C) Making estimates of costs and benefits of various alternatives

D) All of the above

18) What is a capital investment?

A) Using money to buy goods or services

B) Issuing shares of stock of the corporation

C) Authorizing and issuing shares of common stock by a multinational corporation

D) Committing resources to projects that have long period costs and benefits

19) The process of identifying, evaluating, and selecting projects that require substantial amounts of resources and are expected to generate benefits for many years into the future is called:

A) strategy formulation.

B) short-term planning.

C) capital budgeting.

D) operational budgeting.

20) How is the payback period used in capital budgeting?

A) As a measure of a project's risk

B) To determine the amount of funds that will be required in the future

C) To measure the relationship between the project's return and the company's cost of capital

D) None of the above