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Question

Classify weather the following transactions will be recorded in current account or capital account.
(i) Purchase of shares of Reliance by Microsoft.
(ii) Imports of computer spare from Germany.
(iii) Borrowings from World Bank
(iv) Repayment of loan by Indian Government take from Japan.
(v) Gifts received from a relative in America.
(vi) Purchase of Land in England
(vii) Shipping service by an Indian company to a foreign company.

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Solution

Current Account : (ii), (v), (vii).
Capital Account : (i), (iii), (iv), (vi)

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