Question

Read the following statements carefully and choose the correct answer from the following:
Statement 1 - Purchase of shares of reliance by microsoft will be recorded in the capital account.
Statement 2 - Imports of computer spare parts from Germany.

[0.80 marks]

• A. Both the statements are true.
• B. Both the statements are false.
• C. Statement 1 is true and Statement 2 is false.
• D. Statement 2 is true and Statement 1 is false.

Answer 1

The correct option is A Both the statements are true.

Purchase of shares of reliance by microsoft is a part of portfolio investment and it will be recorded in capital account.
Imports of computer spare parts from Germany is a part of import of goods and it will be recorded in the current account.