1.

Which of the following statements is correct with regard to the

accounting for a foreign currency sales on credit and an
accompanying foreign currency forward contract?
a. Accounting for the change in the value of the accounts receivable at the
balance sheet date is based on the difference between the spot rate and the
forward at that date
b. It is not necessary to recognize the foreign currency forward
contract in the financial records at the date the contract is
created
c. It is not necessary to the account for the accounts receivable because the
company has a forward contract
d. Changes in the fair value of the forward contract are based on the change
in the spot rate

2. Over what time period is a hedge of a foregin currency

commitment on a purchase transaction applicable?
a. From the date of the commitment until the date of settlement
b. From the transaction date until the settlement date
c. From the date of the commitment until the transaction date
d. From the date of the commitment until the balance sheet date

3. Which of the following is not a potential recognition date when a

foreign currency commitment exists?
a. Balance sheet date
b. Establishment date of hedge
c. Transaction date
d. Settlement date of hedge