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__ is the use of receipts in a particular currency to match payment obligations in the same currency. (Select the missing word below to complete the sentence) Matching Forward contract Leading Lagging

Question

__ is the use of receipts in a particular currency to match payment
obligations in the same currency. (Select the missing word below to complete
the sentence)
Matching
Forward contract
Leading
Lagging

__ is the use of receipts in a particular currency to match payment obligations in the same currency. (Select the missing word below to complete the sentence) Matching Forward contract Leading Lagging

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PrestonElite · Tutor for 8 years

Answer

Matching

Explain

## Step1: <br />This question asks for a term in finance used to describe the mechanism where receipts in a particular currency are utilized to meet payment obligations in the same currency. The given options contain the following terms: Matching, Forward contract, Leading, and Lagging. Each term has a distinct meaning in the monetary and finance field.<br /><br />## Step2: <br />'Matching' in Accounting or Finance is a concept used to reflect the simultaneous recognition of the expenses associated with an item of income. It doesn't refer to the utilization of currency receipts to meet payment obligations in the same currency.<br /><br />## Step3: <br />A 'Forward contract' is a pact or deal between two parties, where both are tremendously bound by the agreement to trade an asset with respect to the future, at an amount that is filled out concerning the present and is executable in the future. This term doesn’t satisfy the description mentioned in the question.<br /><br />## Step4: <br />'Leading' typically refers to a practice where companies prepay their foreign currency payables. Whereas 'Lagging’ relates to delaying currency payments as much as conceivable whenever the payment obligations outrun the currency receipts.<br /><br />## Step5: <br />According to the definitions of its underlying terms mentioned above, it is evident that the words "Leading" and "Lagging" are related to delaying or prepaying payments and are irrelevant in the context of using receipts in specific currency to cater to payment-related obligations in the identical currency. On the other hand, “Matching” aligns perfectly with the sense as portrayed by the question. Therefore, the right term to fill in the blank to finish the sentence is "Matching."
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