Question

State the following true or false:

(a) Accommodating items are undertaken in order to balance the BOP account.

(b) Foreign exchange received on account of textile will be recorded in the capital account of the BOP.

(c) Autonomous items are also known as "Below the line items".

Answer 1

(a) It is true. Accommodating items are known as below the line items and these are undertaken to correct the situation of BOP.

(b) False, it will be recorded in the credit side of the current account of BOP.

(c) False, these are known as above the line items. These are undertaken before the situation of deficit or surplus in BOP.