Oracle Recruiting Cloud 2021 Implementation Essentials — Question 13

Your ledger currency is USD. At month end you have a balance on the Accounts Payable Liability Account of 100,000 Euros which is equivalent to USD 136,550. This balance needs to be revalued.
The month end exchange rate for revaluation is 1 Euro = 1.3755 USD
What two statements are true for the resulting revaluation run? (Choose two.)

Answer options

• A. The original journal entry in Euros remains the same.
• B. The original journal entry in Euros is updated.
• C. You have an unrealized exchange loss recorded.
• D. You have an unrealized exchange gain recorded.
• E. There is no unrealized exchange gain or loss calculated.

Correct answer: A, C

Explanation

The correct answer A is true because the original journal entry in Euros does not change during the revaluation process; it simply reflects the value in the new exchange rate. Answer C is also correct since the revaluation indicates a loss due to the change in exchange rate, leading to an unrealized exchange loss. The other options are incorrect as they suggest changes to the original entry or misinterpret the gain/loss situation.