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Note: This answer is only correct if the divorce/separation agreement was executed before Dec 31, 2018. For divorce/separation agreements executed or modified after that date, alimony payments are no longer included in income or deductible for the payer.
The FX rate Yen vs $ decreased so if the transaction is denominated in Yens at NOv 23 the $ equivalent was $800, then at Dec 31, $1,000 and by Jan 19 $ 1,250. Why the right answer is c)? If this is because the perspective is from the US Company , I got it.
The question asks likely situation where INCREASED extent of tests are performed. More testing is done when controls appear ineffective....not when they appear effective. When things are good, you don't do more work. When things appear bad, you have to do less work?