Most Foreign Exchange Transactions Are Through the U

question 60

Multiple Choice

Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this is known as ________ whereas ________ are expressed as dollars per foreign unit.

• A) European terms; indirect
• B) American terms; direct
• C) American terms; European terms
• D) European terms; American terms

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Definitions:

Accounts Payable

Immediate financial obligations a business has, indicating money owed to vendors or lenders for products and services that have been delivered but remain unpaid.

Conversion Costs

The combined costs of direct labor and manufacturing overheads incurred when converting raw materials into finished products.

Raw Materials

Basic materials used in the production process, transformed into finished goods through manufacturing.

Days' Payable Outstanding

A financial metric that calculates the average time it takes for a company to pay its invoices from suppliers and vendors.