Question
A UK company has just despatched a shipment of goods to the US. The sale has been invoiced in US dollars and payment is to
A UK company has just despatched a shipment of goods to the US. The sale has been invoiced in US dollars and payment is to be made in three months' time. Neither the UK exporter nor the US importer uses the forward foreign exchange market to cover exchange risk.
If sterling were to strengthen substantially against the US dollar, what would be the foreign exchange gain or loss effects upon the UK exporter and the US importer?
UK exporter US importer
| A. | Loss Gain | |
| B. | Loss No effect | |
| C. | Gain Gain | |
| D. | Gain No effect |
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Auditing A Practical Approach
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren
3rd Canadian edition
1-119-40285-5, 111940276X, 978-1119566007
