Question

How are accounts receivable, denominated in another currency, reported on a U.S. company's balance sheet? A. At the rate when the customer pays the company B. At the rate when the receivable was originally recorded C. At the rate on the balance sheet date D. the receivables are not reported

Answer 1

The correct answer is letter "B": At the rate when the receivable was originally recorded.

Step-by-step explanation:

Accounts receivable are promissory payment notes issued by a company to customers for the sale of goods in credit. The firm sets a term for the repayment when the principal plus interest is to be paid off. In case the repayment is not done the institution incurs in losses and the account receivables become uncollectible receivables.

While talking about a multinational firm, at the moment of recording accounts receivable, the parent company does it recording the promissory note at the exchange rate when the receivable was initially recorded.