Electronic Data Interchange (EDI)

question 160

Multiple Choice

Electronic data interchange (EDI) :

• A) Puts information in a standardized format that can be shared between different computer systems.
• B) Improves information flow between buyers and suppliers.
• C) Allow customers to transmit orders directly to a supplier's computer.
• D) Replaces many of the paper documents previously used for purchase orders and shipping reports.
• E) All of these alternatives about EDI are correct.

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Definitions:

Closing Rate

The exchange rate at the balance sheet date, used for translating the financial statements of a foreign subsidiary into the parent company's reporting currency.

Spot Rate

The current market price at which a particular currency can be bought or sold for immediate delivery.

Reporting Period

This term refers to the specific time span for which financial statements are prepared, like a quarter or a year, to give insights into a company's financial position.

Forward Exchange Contract

A financial contract between two parties to exchange currencies at a predetermined future date and rate, used to hedge against foreign exchange risk.