Fundamentals of accounting - Accounting Basics by ClassOf1


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									              Sub: Accounts                                                                  Topic: Accounting Basics

              Fundamentals of accounting in stock analysis.

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              21. On November 10, Kendra, Inc., a U.S. Company, sold merchandise on credit to Nakakura
                  Company of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 per yen on
                  the date of sale. On December 31, when Kendra prepared its financial statements, the
                  exchange rate was $0.00843. Nakakura Company paid hi full on January 12, when the
                  exchange rate was $0.00861. Kendra should prepare the following journal entry:

                    a. Sales 90
                       Foreign Exchange Gain         90
                    b. Foreign Exchange Loss         90
                       Sales 90
                    c. Accounts Receivable 90
                       Foreign Exchange Gain         90
                    d. Foreign Exchange Loss         90
                       Accounts Receivable 90
                    e. No journal entry is required until the amount is collected.

                    Answer: c. Accounts Receivable                     90
                               Foreign Exchange Gain                   90

              22. For investments in TRADING SECURITIES, which of the follow
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