Question

At the end of the year the balance in Foreign Exchange Fluctuation Account is transferred to ________

Answer 1

Answer:

Transfer to Profit and Loss Account

Explanation:

The Foreign exchange fluctuation Account refers to the change in the value of a domestic currency against the dollar or foreign currency.

If the value depreciated, it meant a decrease in the value of a domestic currency against the dollar.

If the value is appreciated, it means an increase in the value of a domestic currency against the dollar.

if the country paid in advance afterward, there would be a change in the value of a foreign currency due to market conditions; it shows a balance in the foreign exchange fluctuation account

If the balance is positive, it shows a gain

If the balance is negative, it shows a loss

So the balance was transferred to the Profit and Loss account.

#SPJ3