When Foreigners Purchase U

question 154

Multiple Choice

When foreigners purchase U.S. assets, there is an inflow of funds from abroad and this is recorded as a

• A) positive item in the capital account.
• B) positive item in the current account.
• C) negative item in the capital account.
• D) negative item in the current account.

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Definitions:

Payroll Records

Documents that detail the compensation paid to employees, including wages, salaries, bonuses, and deductions.

Fiscal Year

A one-year period that companies use for financial reporting and budgeting, which may not align with the calendar year.

Depreciation Expense

The process of distributing the financial burden of a tangible asset over its life expectancy.

General Journal Entry

A General Journal Entry is a record of financial transactions in the general ledger, detailing the accounts affected, amounts, and dates, serving as the first step in the accounting cycle.