International transactions in Balance of Payment are classified as credits and debits : a. Credit…
Statements a and b give the traditional receipts/payments mnemonic, (1). Balance-of-payments accounts also record non-cash exchanges and imputed counterpart entries, so…
Choose your answer
International transactions in Balance of Payment are classified as credits and debits :
a. Credit transactions are those that involve the receipts of payments from foreigners.
b. Debit transactions involve the payment to foreigners.
c. Credit transactions involve the payment to foreigners.
d. Debit transactions involve the payment from foreigners.
Answer and explanation
Correct answer A
Statements a and b give the traditional receipts/payments mnemonic, (1). Balance-of-payments accounts also record non-cash exchanges and imputed counterpart entries, so credit and debit are accounting directions rather than a requirement that foreign currency physically changes hands.
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RPSC School Lecturer (School Education)