Question

For accounting purposes, a hedge to offset the risk of exchange rate changes on a planned transaction would be classified as the hedge of:___________.

Answer 1

Answer: A forecasted transaction

Step-by-step explanation:

A forecasted transaction is basically refers to the future transaction which is used for the accounting purpose as hedge effectiveness is is the process where the organization protecting the value in the given liability.

According to the given question, the foretasted transaction is one of the hedge classification of the planned transaction which form a relationship between the hedging value and assets.

Therefore, forecasted transaction is the correct answer.