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Question
Inflow of foreign exchange is recorded on the ________ side.
Inflow of foreign exchange is recorded on the ________ side.
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Solution
The correct option is C credit
Balance of Payments is a summary statement in which all the 'Economic Transactions' between 'Residents' and rest of the world is recorded during a particular period of time (usually, one year). It is like a typical business account and is based on double entry system which contains two sides—credit side and debit side. Any transaction which brings in foreign exchange (currency) is recorded on credit side whereas any transaction that causes a country to lose its foreign exchange is recorded on debit side.
Balance of Payments is a summary statement in which all the 'Economic Transactions' between 'Residents' and rest of the world is recorded during a particular period of time (usually, one year). It is like a typical business account and is based on double entry system which contains two sides—credit side and debit side. Any transaction which brings in foreign exchange (currency) is recorded on credit side whereas any transaction that causes a country to lose its foreign exchange is recorded on debit side.
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