A Balance-Of-Payments Statement Includes Three Accounts

question 66

Multiple Choice

A balance-of-payments statement includes three accounts. Two of those accounts are the current account and the capital account. What is the third account found on the balance-of-payments statement?

• A) Investment account
• B) Receivables account
• C) Services account
• D) Credit account
• E) Reserves account

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Definitions:

Dividends

Payments made by a corporation to its shareholders, often derived from the company's profits.

Financing Activities

These are transactions that involve changes in equity and long-term borrowings of the company, part of the cash flow statement.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to calculate operating cash flow.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted.