In the Financial Account, When There Is a Current Account

question 75

Multiple Choice

In the financial account, when there is a current account surplus, there must be a(n) _____ in either the capital or the financial account balance.

• A) deficit (outflow of funds)
• B) surplus (inflow of funds)
• C) balance (no net flow)
• D) equal change (no net flow)

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Definitions:

Excess of Par

The amount by which a security's sale or issue price exceeds its par value.

Treasury Shares

Shares released to the public and afterward reclaimed by the issuer, cutting down the overall count of stock available on the open market.

Journalize

The process of recording transactions in an accounting journal.

Par Common Stock

Par Common Stock refers to the nominal or face value assigned to common shares in the corporate charter, which has implications for stock issuance and accounting.