A Transaction Gain Is Recorded When There Is An

question 9

Multiple Choice

A transaction gain is recorded when there is an:

• A) importing transaction and the exchange rate increases.
• B) exporting transaction and the exchange rate increases.
• C) exporting transaction and the exchange rate decreases.
• D) none of these.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Market Price

The current price at which a good or service can be bought or sold in a market, determined by the forces of supply and demand.