In the Context of Institutions That Make Foreign Exchange Happen

question 21

Multiple Choice

In the context of institutions that make foreign exchange happen, nonfinancial customers include:

• A) governments and businesses.
• B) large banks such as JP Morgan Chase.
• C) small commercial banks.
• D) hedge funds.

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Definitions:

Net Sales

Net sales are the total revenue from goods or services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.

Sales Warranty Accrual Method

A method used in accounting to set aside a portion of sales revenue to cover future warranty claims, ensuring that warranty expenses are matched with related sales in the same period.

Warranty Expense

The estimated cost of honoring product warranties, recognized as an expense by companies.

Implied Service Contract

A legal agreement created by the actions, situation, or circumstances of the parties involved rather than written or spoken words.