Question

In the Capital Account, purchases of assets are recorded as:

विकल्प

• Debits, because foreign exchange goes out

• Credits, because foreign exchange comes in

• Debits, because foreign exchange comes in

• Credits, because foreign exchange goes out

Answer 1

Purchases of assets are Debits because foreign exchange goes out of the country. Conversely, sales of assets are Credits because foreign exchange comes into the country.