A Canadian Company Does Some Business in the U

question 93

Multiple Choice

A Canadian company does some business in the U.S.and as a part of these activities they keep US$50,000 on deposit in a U.S.Bank account.The bookkeeper noticed that this year when the account was placed on the balance sheet it was less than last the year's comparative number, even though the amount in the account hadn't changed.What would explain this apparent change?

• A)Poor internal controls
• B)Changes in purchasing power
• C)Exchange rate differences
• D)Time value of money

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Definitions:

Rule of 70

A method used to estimate the number of years required for a quantity to double, given its annual growth rate, by dividing 70 by that growth rate.

Growing Economy

Describes an economy that is experiencing an increase in goods and services produced over time, indicative of economic development and expansion.

Interest Rate

The cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, typically expressed as an annual rate.