Question $16($Mandatory$)(1\mathrm{.}5$ points$)$

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What is a company's functional currency?

Question $16$ options:

the currency of the primary economic environment in which it operates.

the currency of the country where it has its headquarters.

the currency in which it prepares its financial statements.

the reporting currency of its parent for a subsidiary.

the currency it chooses to designate as such.

Question $17($Mandatory$)(1$ point$)$

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Angela, Inc., a U$.$S$.$ company, had a euro RECEIVABLE from exports to Spain and a British pound PAYABLE resulting from imports from England. Angela recorded foreign exchange gains related to both its euro receivable and pound payable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date?

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Question $17$ options:

B above

E above

C above

D above

A above

Question $18($Mandatory$)(2$ points$)$

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Norton Co$.,$ a U$.$S$.$ corporation, sold inventory on December $1,2023,$ with a payment of $20,000$ British pounds to be received in sixty days. The pertinent exchange rates were as follows:

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What amount of foreign exchange gain or loss should be recorded on December $31?$

Question $18$ options:

$$0$ gain.

$$1,882$ loss.

$$1,882$ Gain

$$3,032$ Gains.

$$941$ gain.

Question $19($Mandatory$)(2$ points$)$

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Pigskin Co$.,$ a U$.$S$.$ corporation, sold inventory on credit to a British company on April $8,2024.$ Pigskin received a payment of $35,000$ British pounds on May $8,2024.$ The exchange rate was $$1=0\mathrm{.}65$ on April $8$ and $$1=0\mathrm{.}70$ on May $8.$ What amount of foreign exchange gain or loss should be recognized? $($round to the nearest dollar$)$

Question $19$ options:

$$500$ loss

$$500$ loss

$$500$ gain

$$3,846$ Gains

No gain or loss should be recognized.

Question $20($Mandatory$)(1\mathrm{.}5$ points$)$

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Under FASB $95$ the direct method of cash flows is recommended for both Consolidated Financials and Unconsolidated entities: however, the industry still tends to use the indirect method in the USA. What is the basic difference when comparing the Consolidated Cash Flow of a consolidated entity vs$.$ an Unconsolidated entity under FASB $95$ for the operating section?

Question $20$ options:

Parent's dividends would be subtracted as a financing activity.

Gain on sale of land would be deducted from net income.

Noncontrolling interest in Net Income of the subsidiary must be added to Net Income.

Proceeds from the sale of long$-$term investments would be added to investing activities.

Loss on sale of equipment would be added to net income.