Which one of the following pairs is not correctly matched with regard to balance of payments accounts?

Import of goods and services - Debit in the current account

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Receipts of transfer payment - Credit in the current account

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Direct investment receipt - Credit in the capital account

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Portfolio investment payments - Debit in the current account

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Solution

The correct option is D Portfolio investment payments - Debit in the current account
The balance of payments account for one country records all the payments that effect funds transfers between that nation and the rest of the world. Payments from foreigners to the domestic country are credited to the account. These include all foreign payments for exports, payments from foreign tourists for services, investment income made by the domestic country in foreign markets, unilateral transfers and capital inflows.

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