Netting Can Achieve All but One of the Following

question 17

Multiple Choice

Netting can achieve all but one of the following:

• A) Cross border transactions between subsidiaries are reduced.
• B) Transactions costs are reduced.
• C) Currency conversion costs are reduced.
• D) Transaction exposure is eliminated.

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Definitions:

Rent Revenue

Income earned from leasing out properties or equipment.

Cost of Goods Available

The total inventory cost of goods that a company has available for sale at the beginning of an accounting period, including purchases made during the period.

Net Purchases

Net purchases are the total purchases made by a business after subtracting any returns, allowances, and discounts from the gross purchases.

Freight-In

The cost associated with the transportation of goods from the supplier to the buyer, typically added to the cost of purchases.