Question

How are accounts payable, denominated in another currency, reported on a U.S. company's balance sheet? A. At the exchange rate when the payable was originally recorded B. At the exchange rate when the payables are due C. At the exchange rate on the balance sheet date D. The payables are not reported

Answer 1

Answer:

B) At the exchange rate when the payable are due.

Explanation:

Balance sheet: A statement which shows company's balance of  assets, liabilities and equities.

• The correct way to report accounts payable of another currency in U.S. Balance sheet is to record them according to the exchange rate when the payable are still due. Because if the the payable are paid then there is no need to record it on the basis of exchange rate, it will mislead the financial statements of the company.

Answer 2

Answer: C. At the exchange rate on the balance sheet date

Explanation: Differences in exchange arise when items of monetary value are settled or translated at rates different from those at which they were translated when initially recognised and as a result, accounts payable (amounts due to vendors or suppliers for goods or services received that have not yet been paid for), denominated in another currency, is reported on U.S. company's balance sheet at the exchange rate on the balance sheet date.