On December 1, 2016, Vibrant Company, a US firm, sold goods on credit to a retail...

 

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On December 1, 2016, Vibrant Company, a US firm, sold goods on credit to a retail outlet located in Italy. The transaction was denominated in Euros. The receivable was due in 60 days and the retailer paid the full amount in Euros on the due date. Vibrant did not enter into a forward contract. On December 31, 2016, Vibrant should Od a) not record a transaction gain or loss, because no forward contract was entered. b) not record a transaction gain or loss because the retail outlet paid in full on the due date. c) must record a transaction gain for the full value of the receivable. algiuM:L d) record a transaction gain or loss due to the fluctuation of the foreign currency (Euro) value. On December 1, 2016, Vibrant Company, a US firm, sold goods on credit to a retail outlet located in Italy. The transaction was denominated in Euros. The receivable was due in 60 days and the retailer paid the full amount in Euros on the due date. Vibrant did not enter into a forward contract. On December 31, 2016, Vibrant should Od a) not record a transaction gain or loss, because no forward contract was entered. b) not record a transaction gain or loss because the retail outlet paid in full on the due date. c) must record a transaction gain for the full value of the receivable. algiuM:L d) record a transaction gain or loss due to the fluctuation of the foreign currency (Euro) value.

Answer rating: 100% (QA)

ANSWER A Not record a transaction gain or loss because no forward contract was entered When the forw... View the full answer