Which of the Following Is Considered to Be an Outflow

question 16

Multiple Choice

Which of the following is considered to be an outflow of foreign direct investment (FDI) from the United States?

• A) General Motors sells Saab, its Swedish subsidiary, to a Chinese company.
• B) General Motors uses the proceeds of its sale of Saab to purchase British treasury bonds.
• C) General Motors earns interest on its British treasury bonds, which it then credits to its accounts in the United States.
• D) General Motors invests $100 million to modernize its U.K. plant that produces Vauxhall automobiles.

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Definitions:

Credits

Accounting entries that increase liabilities or equity or decrease assets or expenses.

Journal Entries

The recording of financial transactions into a company's accounting records, documenting the details of financial transactions that affect the financial statements.

Debit Accounts

Accounts that are increased with a debit entry, indicating either an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Credit Accounts

Accounts that are increased by credits and decreased by debits, reflecting liabilities and shareholder equity.