USCorporation Well's Petroleum Borrows Money to Build an Oil Well

question 43

Multiple Choice

U.S.corporation Well's Petroleum borrows money to build an oil well in Texas and to build another in Venezuela.

• A)The borrowing for the well in the U.S.and the well in Venezuela both count as part of the demand for loanable funds in the U.S.market.
• B)Neither the borrowing for the well in the U.S.nor the well in Venezuela count as part of the demand for loanable funds in the U.S.market.
• C)The borrowing for the well in the U.S.counts as part of the demand for loanable funds in the U.S.The borrowing for the well in Venezuela does not count as part of the demand for loanable funds in the U.S.market.
• D)The borrowing for the well in Venezuela counts as part of the demand for loanable funds in the U.S.The borrowing for the well in the US.does not counts as part of the demand for loanable funds in the U.S.market.

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Definitions:

Profit Or Loss Test

A method used to assess the financial performance of a company by determining whether it has made a profit or incurred a loss over a certain period.

Separately Reportable

Criteria under which certain activities or financial results must be disclosed individually due to their significance within financial statements or to regulatory bodies.

Industry Segments

Specific categories within an industry that companies can be classified under based on their main business activities.

Revenue Test

A criterion used to determine whether a business segment's revenue is sufficient for it to be considered a reportable segment under financial reporting standards.