Questions from Advanced Accounting

Q: What is the difference between pegged and floating exchange rates?

What is the difference between pegged and floating exchange rates?

Q: You read in the newspaper, "One U.S.

You read in the newspaper, "One U.S. dollar can be exchanged for 1.15 Canadian dollars." Is this a direct or an indirect quotation? If your answer is indirect, what is the direct quotation? If your an...

Q: Differentiate between a spot rate and a forward rate.

Differentiate between a spot rate and a forward rate.

Q: How are foreign-currency-denominated assets and liabilities measured on

How are foreign-currency-denominated assets and liabilities measured on the transaction date? How are they measured on a subsequent balance sheet date?

Q: Describe when to use the closing rate and when to use the

Describe when to use the closing rate and when to use the historical rate when translating assets and liabilities denominated in a foreign currency. Explain whether this practice is consistent with th...

Q: Differentiate between a spot rate and a closing rate.

Differentiate between a spot rate and a closing rate.

Q: Differentiate between the accounting for a fair value hedge and a cash

Differentiate between the accounting for a fair value hedge and a cash flow hedge.

Q: List some ways that a Canadian company could hedge against foreign currency

List some ways that a Canadian company could hedge against foreign currency exchange rate fluctuations.

Q: When will the premium paid on a forward contract to hedge a

When will the premium paid on a forward contract to hedge a firm commitment to purchase inventory be reported in income under a cash flow hedge? Explain.

Q: The FCT and PCT methods each produce different amounts for translation gains

The FCT and PCT methods each produce different amounts for translation gains and losses due to the items at risk. Explain.