Foreign Reserves Are Used to

question 15

Multiple Choice

Foreign reserves are used to

• A)help foreigners who need additional funds.
• B)provide military support to foreign operations,eg.,the French legion,UN peacekeepers.
• C)cover foreign debt,import purchases and other demands for foreign currency that banks might encounter.
• D)support foreign operations that are branches but not subsidiaries.

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Definitions:

Insurance Expense

The amount a company spends on insurance policies to cover various risks, recorded as an expense in the accounting period in which it is incurred.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.

Credit

In accounting, it refers to the entry that decreases assets or increases liabilities and equity on the company's balance sheet.

Collections

The act of seeking out the settlement of debts from businesses or individuals.