Which of the Following Statements Is Incorrect with Respect to the Balance

question 33

Multiple Choice

Which of the following statements is incorrect with respect to the balance of payments?

• A)It constitutes a record of transactions between residents within one country.
• B)It consists of a current account, a capital account, and an account to record omissions and errors.
• C)Transactions that result in a demand for domestic currency are always entered as a credit.
• D)It must balance in the aggregate, but separate accounts can show deficits or surpluses.
• E)It constitutes a record of a country's trade in goods and services and financial assets.

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Definitions:

Trial Balance

A financial spreadsheet where the totals from all accounts are gathered into columns for debits and credits, serving to verify the mathematical accuracy of a firm's accounting records.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, including assets, liabilities, and equity.

Ledger

A comprehensive collection of all accounts used by an organization, showing the changes made to each account due to transactions, and the current balance.

Journal

An accounting record where all transactions are initially recorded using the double-entry bookkeeping system before they are transferred to accounts in the general ledger.