AA II - FCT (II)

How trade position of a country influences the exchange rate?

• Negative trade position drives the increase in direct exchange rate

• Negative trade position drives the decrease in direct exchange rate

• Positive trade position drives the increase in direct exchange rate

• Positive trade position gives neutral impact to direct exchange rate

If government set the preferential exchange rate for import-export activities, this policy is called as ....

• fixed exchange rate

• bid rate

• fixed forward rate

• central bank rate

PT Indi, Tbk sells merchandise on account to Houston Industries Ltd. located in Houston, US, for Rp 15mios, or USD1,000 when the direct exchange rate is Rp15.000, and receives payment when the exchange rate is Rp14.000. Ignore Cost of Goods Sold.

How to do records if the seller issues invoice in Rp?

• Dr. Cash (+A) Rp14mios

  Cr. AR (-A) Rp14mios

• Dr. Cash (+A) Rp15mios

  Cr. AR (-A) Rp15mios

• Dr. AR (+A) Rp14mios

  Cr. Sales (+R, +SE) Rp14mios

• Dr. AR (+A) Rp15mios

  Cr. Revenues (+R, +SE) Rp15mios

PT Indi, Tbk sells merchandise on account to Houston Industries Ltd. located in Houston, US, for Rp 15mios, or USD1,000 when the direct exchange rate is Rp15.000, and receives payment when the exchange rate is Rp14.000. Ignore Cost of Goods Sold.

How to do records if the seller issues invoice in USD?

• Dr. AR (fc) (+A) Rp15mios

  Cr. Sales (+R, +SE) Rp15mios

• Dr. AR (fc) (+A) Rp14mios

  Cr. Sales (+R, +SE) Rp14mios

• Dr. Cash (fc) (+A) Rp15mios

  Cr. Exchange gain (+G, +SE) Rp1mio

  Cr. AR (fc) (-A) Rp14mios

• Dr. Cash (fc) (+A) Rp15mios

  Cr. Exchange loss (-L, +SE) Rp1mio

  Cr. AR (fc) (-A) Rp14mios

The factors below influences the exchange rates ..., except ...

• inflation

• net trade position

• interest rate

• purchasing power parity