Unilateral Transfers Between Countries Are

question 59

Multiple Choice

Unilateral transfers between countries are

• A) long-term loans.
• B) part of national income, but not part of the current account
• C) part of the current account, but not a part of national income.
• D) known for reducing the income of capital owners.
• E) international gifts or payments that do not correspond to the purchase of any good, service, or asset.

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Definitions:

Translation Adjustment

An accounting entry that reflects the impact of currency fluctuations in the financial statements of a company with operations in foreign currencies.

Foreign Currency

Currency used that is not the domestic currency of the country in which a transaction is being conducted.

Net Asset Balance Sheet Exposure

The risk that the value of a company's assets minus its liabilities, measured in its reporting currency, will decrease due to foreign exchange rate fluctuations.

Translation Adjustment

An adjustment made in the financial statements to account for exchange rate variations in translating operations of foreign subsidiaries into the parent company’s reporting currency.