China Is Currently Experiencing a Surplus in Its Current Account

question 64

Multiple Choice

China is currently experiencing a surplus in its current account and its capital/financial accounts. Which of the following is NOT a contributing factor for this unusual situation?

• A) The exceptional growth in the Chinese economy contributes to the current account surplus.
• B) The positive prospects for China's continued growth contribute to the capital/financial account surplus.
• C) China's inevitable acquisition of Taiwan is driving the market for Chinese investment.
• D) All of the above are contributing factors for China's twin surpluses.

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Definitions:

Segregation of Duties

A risk management and control strategy that divides tasks among different people to reduce the risk of fraud or error.

Cash Register

A cash register is a mechanical or electronic device for registering and calculating transactions at a point of sale, equipped with a drawer for storing cash.

Independent Internal Verification

The audit process within an organization where transactions and processes are reviewed by a person not involved in their execution, aimed at enhancing accuracy and reliability.

Reconciling Bank Statement

The process of ensuring the amounts on a bank statement match the corresponding amounts in a company's financial records.