Company X denominated a December 1, 20X9, purchase of goods in a currency other than its functional currency. The transaction resulted in a payable fixed in terms of the amount of foreign currency, and was paid on the settlement date, January 10, 2010. Exchange rates moved unfavorably at December 31, 20X9, resulting in a loss that should: Multiple Choice be included as a separate component of stockholders' equity at Dec. 31, 20X9. be included as a component of income from continuing operations for 20X9. be included as a deferred charge at December 31, 20X9. not be reported until January 10, 2010, the settlement date.

Question

Business

Alonzo Robbins

28 October, 13:58

Company X denominated a December 1, 20X9, purchase of goods in a currency other than its functional currency. The transaction resulted in a payable fixed in terms of the amount of foreign currency, and was paid on the settlement date, January 10, 2010. Exchange rates moved unfavorably at December 31, 20X9, resulting in a loss that should: Multiple Choice be included as a separate component of stockholders' equity at Dec. 31, 20X9. be included as a component of income from continuing operations for 20X9. be included as a deferred charge at December 31, 20X9. not be reported until January 10, 2010, the settlement date.

+5

Answers (1)

Know the Answer?

Zachery Marshall · Answer 1

Be included as a component of income from continuing operations for 20X9

Explanation:

To find out the correct balance of income from continuing operations, we have to add the loss as the loss is added in the income from continuing operations.

Moreover, in this question the golden rule of accounting applies which says:

Debit all losses and expenses and credit all income and gains which apply in the nominal account that record any type of transactions. example - sales account, purchase account, etc.