International Financial Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on International Financial Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our International Financial Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of International Financial Management mcq questions that explore various aspects of International Financial Management problems. Each MCQ is crafted to challenge your understanding of International Financial Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our International Financial Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of International Financial Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your International Financial Management knowledge to the test? Let's get started with our carefully curated MCQs!

International Financial Management MCQs | Page 9 of 13

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Q81.
What is the impact on the BoP account when a country exports goods to another country?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (a).Credit entry Explanation:When a country exports goods, it creates demand for the domestic currency, resulting in a credit entry in the BoP account.
Q82.
How does the BoP account represent imports in terms of currency flow?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (b).Debit entry Explanation:Imports increase the supply of the domestic currency, leading to a debit entry in the BoP account as it represents a use of foreign currency.
Q83.
What are the three main components of the Balance of Payments (BOP) account?

a.

Goods, Services, and Capital

b.

Current Account, Capital Account, and Official Reserves

c.

Imports, Exports, and Unilateral Transfers

d.

Merchandise, Reserve Assets, and Freight

Discuss
Answer: (b).Current Account, Capital Account, and Official Reserves Explanation:The BOP account consists of the Current Account, Capital Account, and Official Reserves as its three main components.
Q84.
What are the two broad categories into which transactions in the Balance of Payment (BOP) account are classified?

a.

Goods and Services

b.

Imports and Exports

c.

Current Account and Capital Account

d.

Investments and Assets

Discuss
Answer: (c).Current Account and Capital Account Explanation:Various transactions like exports/imports of goods and services, payment of dividend/interest, investments in assets, etc., are recorded in the BoP account, and these transactions are broadly classified into the current account and capital account.
Q85.
What transactions are recorded in the Current Account of the BOP?

a.

Changes in foreign assets and liabilities

b.

Imports and exports of goods and services

c.

Unilateral transfer of goods and services

d.

Changes in official reserves

Discuss
Answer: (b).Imports and exports of goods and services Explanation:The Current Account of the BOP records imports and exports of goods and services, as well as unilateral transfers of goods and services.
Q86.
Where are transactions resulting in changes in foreign assets and liabilities recorded in the BOP?

a.

Current Account

b.

Capital Account

c.

Official Reserves

d.

Merchandise Account

Discuss
Answer: (b).Capital Account Explanation:Transactions resulting in changes in foreign assets and liabilities are recorded in the Capital Account of the BOP.
Q87.
What is the difference between the Capital Account and the Reserve Account in the BOP?

a.

The Reserve Account includes reserve assets, while the Capital Account does not.

b.

The Capital Account includes reserve assets, while the Reserve Account does not.

c.

There is no difference; both accounts are identical.

d.

The Reserve Account records only unilateral transfers.

Discuss
Answer: (a).The Reserve Account includes reserve assets, while the Capital Account does not. Explanation:The Reserve Account is similar to the Capital Account, but it includes "reserve assets" as a distinguishing feature.
Q88.
What does Merchandise trade in the BOP cover?

a.

Services only

b.

Unilateral transfers only

c.

Moveable goods transactions

d.

Capital transactions

Discuss
Answer: (c).Moveable goods transactions Explanation:Merchandise trade in the BOP covers all transactions related to moveable goods, including the change of ownership from residents to non-residents (exports) and vice versa (imports).
Q89.
How are exports valued in the Merchandise trade in the BOP?

a.

C.I.F. basis

b.

F.O.B. basis

c.

Freight basis

d.

Insurance basis

Discuss
Answer: (b).F.O.B. basis Explanation:Exports in the Merchandise trade are valued on the F.O.B. (Free on Board) basis, separating international freight and insurance from the value of the goods.
Q90.
What is the Balance on Merchandise Trade Account in the BOP?

a.

The total value of imports

b.

The total value of exports

c.

The difference between exports and imports

d.

The sum of exports and imports

Discuss
Answer: (c).The difference between exports and imports Explanation:The Balance on Merchandise Trade Account is the difference between the total value of exports and imports, representing either a deficit or a surplus.
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