Which of the Following Is a Valid Example of Costs

question 9

Multiple Choice

Which of the following is a valid example of costs associated with global sourcing decisions?

• A) To reduce the effects of currency fluctuations retailers avoid the use of finan?cial instruments such as options and futures contracts.
• B) For American retailers in the U.S.A., inventory turnover is likely to be higher when purchasing from suppliers outside the United States than from domestic suppliers.
• C) The legal-political system in foreign countries should never impact the human resource management practices that retailers can use in those countries.
• D) If, for example, the Indian rupee increases relative to the Canadian dollar, the cost of private-label merchan?dise produced in India and imported for sale into Canada will decrease.
• E) If, for example, the Indian rupee decreases relative to the Canadian dollar, the cost of private-label merchan?dise produced in India and imported for sale into Canada will decrease.

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Definitions:

Reversing Entry

An accounting entry made at the beginning of a period to reverse the effects of certain adjustments made in the previous period.

Salary Expense

The cost incurred by a business to pay its employees.

Financial Statement

An organized log of economic actions and the financial situation of a firm, an individual, or any other unit.

Permanent/Temporary

Pertaining to accounts in accounting where permanent accounts are balance sheet accounts that carry over balances into the next financial period, and temporary accounts are reset or closed to equity through retained earnings at the end of a period.