In a Clearing Agreement, When an Imbalance Occurs and One

question 103

Multiple Choice

In a clearing agreement, when an imbalance occurs and one country owes money to the other, ____ are paid in an agreed upon hard currency.

• A)countervailing credits
• B)swing credits
• C)switch credits
• D)clearing credits

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Definitions:

Variable Costing

A costing approach in which only variable manufacturing costs are product costs, and fixed manufacturing costs are period costs (expenses).

Absorption Costing

A costing approach in which all manufacturing costs are charged to the product.

Variable

An element, feature, or factor that is subject to change, often used in financial analysis, statistics, and scientific research.

Absorption

In accounting, it refers to the process of incorporating all costs of production into the value of a product, including both direct and indirect expenses.