Why must the two-transaction approach be used for recording foreign currency transactions under U.S. GAAP?
A. The two-transaction approach is required under IFRS.
B. S. GAAP requires conservatism in financial reporting.
C. All other methods are excessively complicated to use and therefore obscure the essence of the transaction.
D. Management made two decisions: one to sell and another to extend credit in a foreign currency.
Answer:D
Why must the two-transaction approach be used for recording foreign currency transactions under U.S. GAAP?
A. The two-transaction approach is required under IFRS. B. S. GAAP requires conservatism in financial reporting. C. All other methods are excessively complicated to use and therefore obscure the essence of the transaction. D. Management made two decisions: one to sell and another to extend credit in a foreign currency.