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Question
Sales of shares of an Indian company to a Chinese customer is a ______ item on the ______ of Balance of Payments.
Sales of shares of an Indian company to a Chinese customer is a ______ item on the ______ of Balance of Payments.
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Solution
- a) Debit, Capital account.
- b) Debit, Current account.
- c) Credit, Capital account.
- d) Credit, Current account.
Answer b: Debit, Current account.
Explanation: Since the sale of shares made by a Chinese customer is a debit (negative) item where the money will flow outside the country and the current accounts that record the changes in the country’s net income.
- a) Debit, Capital account.
- b) Debit, Current account.
- c) Credit, Capital account.
- d) Credit, Current account.
Answer b: Debit, Current account.
Explanation: Since the sale of shares made by a Chinese customer is a debit (negative) item where the money will flow outside the country and the current accounts that record the changes in the country’s net income.
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