Iberico plc, a Spanish firm whose functional currency is EUR, bought goods from a British supplier at a cost of 10,000 GBP paid in cash. The exchange rate on the date of sale was 1 GBP = 1.2 EUR. Which the journal entry shall Iberico plc prepare regarding the purchase? Select one:

Iberico plc, a Spanish firm whose functional currency is EUR, bought goods from a British supplier at a cost of 10,000 GBP paid in cash. The exchange rate on the date of sale was 1 GBP = 1.2 EUR. Which the journal entry shall Iberico plc prepare regarding the purchase? Select one:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Iberico plc, a Spanish firm whose functional currency is EUR, bought goods from a
British supplier at a cost of 10,000 GBP paid in cash. The exchange rate on the date of
sale was 1 GBP = 1.2 EUR. Which the journal entry shall Iberico plc prepare regarding
the purchase?
Select one:
a.
DR Inventories 12,000 EUR, CR Cash 10,000 GBP
b. DR Inventories 12,000 EUR, CR Cash 12,000 EUR
C.
DR Inventories 12,000 GBP, CR Cash 12,000 GBP
d. DR Inventories 10,000 GBP, CR Cash 10,000 GBP
Clear my choice

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