A USPurchase of Oil from Overseas Paid for with Foreign Currency

question 17

Multiple Choice

A U.S.purchase of oil from overseas paid for with foreign currency it already owned

• A)increases U.S.net exports,and increases U.S.net capital outflow.
• B)increases U.S.net exports,and decreases U.S.net capital outflow.
• C)decreases U.S.net exports,and increases U.S.net capital outflow.
• D)decreases U.S.net exports,and decreases U.S.net capital outflow.

Understand the composition and calculation of net income.

Recognize how inventory is classified in financial statements.

Calculate cost of goods sold and understand its impact on gross profit.

Understand the significance of nonoperating income and expenses on overall financial performance.

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Definitions:

Notes Receivable

Short-term or long-term financial assets representing the promise of another party to pay a specific sum of money at a future date.

Journal Entry

A record in accounting that notes every transaction a business makes, providing a chronological log necessary for the financial statements.

Promissory Note

A written, legal agreement where one party promises to pay another a specific sum of money on a certain date or upon demand.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.