Which of the Following Transactions Would Be Included in Japan's

question 88

Multiple Choice

Which of the following transactions would be included in Japan's current account?

• A)A Japanese citizen purchases 50 shares of Google stock.
• B)An American citizen purchases 50 shares of Toshiba stock.
• C)A Japanese citizen purchases a new Toyota made in Japan.
• D)An American citizen purchases a new Toyota made in Japan.

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Definitions:

Expense Recognition Principle

An accounting principle that states expenses should be recognized in the same period as the revenues they helped to generate, ensuring financial statements accurately reflect business performance.

Expenses

The costs incurred by a business in the process of earning revenue, including operations, maintenance, and administrative costs.

Revenues

The total income generated from normal business operations and other activities, before any expenses are subtracted.

Cash Basis

An accounting method that recognizes revenues and expenses only when cash is exchanged.