The Current Account in the BOP Records

question 63

Multiple Choice

The current account in the BOP records:

• A) all money flowing between countries.
• B) a nation's yearly exports and imports of goods and services.
• C) only the transactions involving capital goods in international trade.
• D) only the transactions involving consumer goods in international trade.
• E) only those goods and services purchased on credit in international transactions.

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Definitions:

Receivable into Cash

The process or activity of converting money that is owed to a company by its customers into actual cash, usually through collection efforts.

Excess Cash

Funds that exceed the normal operating needs of a company, which might be used for investments, acquisitions, or improving financial ratios.

Marketable Securities

Financial instruments that can easily be converted to cash due to their high demand and short maturity period.

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, under which payments are sent directly to a location accessible by the bank.