Which of the Following Statements Is TRUE

question 37

Multiple Choice

Which of the following statements is TRUE?

• A) A country runs a capital account deficit if it imports more than it exports.
• B) The overall sum of all the entries in the balance of payments must be positive.
• C) A country runs a current account surplus if it sells more of its assets abroad than it buys abroad.
• D) If the current account is in surplus, then the sum of the financial and capital accounts must be in deficit.

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Definitions:

Fiscal Year

The one-year period an organization uses for accounting purposes and preparing financial statements, which may or may not align with the calendar year.

Revenue Recognition Principle

A fundamental accounting principle that dictates when revenue should be recognized in the financial statements, typically when it is earned and realizable.

Prepaid Expenses

Funds disbursed before receiving goods or services, documented as assets until they are utilized or consumed.

Expense Recognition Principle

An accounting principle that matches expenses with revenues in the period in which they're incurred to produce those revenues.