The Diamond Store Began Business on June 1

question 67

Multiple Choice

The Diamond Store began business on June 1. During the month of June, it had cash payments of $9,000.At the end of June, it had a $14,000 balance in cash. Based on this information, the cash receipts for the month of June:

• A) were $5,000.
• B) were $16,000.
• C) were $23,000.
• D) cannot be determined.

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Definitions:

International Monetary System

The framework of rules, institutions, and agreements by which countries exchange currencies and settle international financial transactions.

Flexible Exchange Rate

Rate determined in foreign exchange markets by the forces of demand and supply without government intervention.

Fixed Exchange Rate

A currency system where the value of a currency is pegged to another currency, a basket of currencies, or a physical commodity like gold.

Exchange Rate

The price of one currency in terms of another, determining how much foreign currency can be exchanged for a unit of domestic currency.