An Example of a Transaction That Will Be a Surplus

question 67

Multiple Choice

An example of a transaction that will be a surplus item on the Canadian balance of payments is

• A)a Canadian purchasing French wine.
• B)a French subsidiary's plant in Nova Scotia purchasing parts from the main plant in Paris.
• C)a gift of wheat from the Canadian government to India.
• D)a tourist from Germany flying from Toronto to Vancouver on Canadian Airlines.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, divided by revenue, expressed as a percentage, indicating the financial health and profitability of a company's core activities.

Net Operating Income

The profit realized from a business's operations after subtracting all operation-related expenses from gross income.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue is contributing to the fixed costs and net profit after covering the variable costs.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage, indicating the percentage of sales revenue that turns into profit.