Question

Fill in the missing blanks for how these items relate to each other:

	Type of transaction	Foreign Currency against USD	Foreign Exchange Gain or Loss	Explain WHY…
a.	Export sale	Depreciates
b.	Import sale		Gain
c.		Appreciates	Loss

For 1a., explain in English to some poor soul who is neither in accounting nor finance what is happening.

Answer 1

a.	Export sale	Depreciates	Gain	First this is to be noted all the export and import transcations has to go through USD, if the Foreign Currency weakness.. We will get more revenue	A Export was done for $10,000 when the INR -Usd Exchange rate was 70.. Once the INR weakness say its goes to 71 , then revenue will be 710,000
b.	Import sale	Appreciates	Gain	If the Foreign Currenct Appreciates, then we need to buy USD with less money, we need to Pay less	A Import was done for $10,000 when the INR -Usd Exchange rate was 70.. Once the INR Strengths say its goes to 69 , We need to Pay 690,000
c.	Export sale	Appreciates	Loss	if the Foreign Currency Appreicates We will get less revenue	A Export was done for $10,000 when the INR -Usd Exchange rate was 70.. Once the INR Strengths say its goes to 69 , We will get revenue of 690,000