When There Is a Negative Entry for Unilateral Transfers in the Balance

question 144

Multiple Choice

When there is a negative entry for unilateral transfers in the balance of payments, it means that

• A)there must be an offsetting positive sign in the capital account.
• B)U.S. residents gave more to foreign residents than foreign residents gave to U.S. residents.
• C)U.S. residents purchased less services from foreign countries than foreign countries purchased from U.S. residents.
• D)U.S. residents purchased more services from foreign countries than foreign countries purchased from U.S. residents.

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Definitions:

Confirmatory Value

The aspect of relevant financial information that helps users of financial statements confirm or correct prior expectations.

Mispriced Security

A financial security (such as a stock or bond) that is selling for a price significantly different from its intrinsic value.

Faithful Representation

An accounting principle that financial data must be complete, neutral, and free from error, accurately representing the financial reality.

Comparability

An accounting principle that ensures financial statements can be easily compared across different periods or companies, enhancing transparency.