The Effect That a Gift Given to a U

question 24

Multiple Choice

The effect that a gift given to a U.S. citizen from a foreign resident will have on the balance of payments is to

• A) increase the current account balance.
• B) have no effect on the balance of payments if the gift was made in the U.S.
• C) have no effect on the balance of payments if the gift was made by a foreign country.
• D) decrease the balance of payments.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting overheads, taxes, interest, and depreciation.

Income From Operations

Earnings generated from a company's regular business activities, excluding deductions of interest and tax.

Ending Inventory

Ending inventory refers to the total value of unsold goods that a company holds at the end of an accounting period.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, which can be included in the inventory of either party depending on the shipping terms.