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In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a item in the SA balance of payments; the deposit of funds in a foreign bank account by a SA citizen item in the SA balance of payments
In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a item in the SA balance of payments; the deposit of funds in a foreign bank account by a SA citizen item in the SA balance of payments. (4 marks) A B Debit; also is a debit Debit; is a credit Credit; is a debit Credit; also is a credit ? D
Expert Solution
The correct answer is C i.e. Credit; is a debit
In balance of payment accounting, debit item is any flow that leads to money leaving the country and vice versa. In this case, sale of foreign production facility brings foreign exchange in the country and hence, a credit item. In case the deposit of funds is in a foreign bank, account, then it is a debit item.
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