The correct answer is $**$As an adjustment to stockholders' equity$**.$When a company has a receivable in a foreign currency, changes in the exchange rate between the time the receivable was recorded and when cash is received create foreign exchange gains or losses. These gains or losses are recognized in the income statement as part of operating income, which ultimately flows through to retained earnings $($a component of stockholders' equity$).$Here's why the other options are incorrect:$-**$As an extraordinary capital expenditure$**$: Foreign exchange gains$/$losses are not capital expenditures and are not considered extraordinary items under current accounting standards$-**$As a prior period adjustment$**$: These are not corrections of errors from prior periods, but rather normal consequences of currency fluctuations$-**$As an adjustment to purchases$**$: Foreign exchange gains$/$losses on receivables are not related to the cost of purchases or inventoryThe foreign exchange gain or loss is calculated as the difference between the U$.$S$.$ dollar value of the receivable at the transaction date versus the collection date, and this difference is recognized in the income statement, ultimately affecting stockholders' equity through retained earnings.