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Question
Giving valid reason, state whether the following statement is true or false:
Dividend received from investment abroad is recorded on the credit side of the capital account.
Options
True
False
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Solution
This statement is False.
Reason:
Dividends from foreign investments are factor income from overseas and will be recognized on the credit side of the current account.
RELATED QUESTIONS
Explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard.
Should a current account deficit be a cause for alarm? Explain.
Which of the following transactions are recorded in the current account of the balance of payments?
Identify the correct matched pair from Column A to Column B and choose the correct alternative:
| Column A | Column B |
| 1. Export of weapons to Vietnam | (a) Credit side of Current Account |
| 2. Import of Apache Helicopter from USA | (b) Capital Account of Balance of Payments |
| 3. Remittances from relative from UAE | (c) Debit side of Current Account of Balance of Payments |
| 4. Investment by Tesla Incorporation in India | (d) Credit side of Current Account of Balance of Payments |
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Current account records exports and imports of visible and invisible items only.
Statement 2: The balance of the current account is the difference between the sum of credit items and the sum of debit items on the current account.
Read the following statements carefully:
Statement 1: Export of financial services by India will be recorded on credit side of current account.
Statement 2: Foreign Direct Investments in India will be recorded on credit side of capital account.
In the light of the given statements, choose the correct alternative:
Tourism, banking, insurance, transportation, and software services are examples of which component of the current account?
Wages, profits, interest, and rent earned from or paid abroad are recorded in the current account under:
When receipts on the current account exactly equal payments, the current account is said to be:
The balance on the current account has which two components?
The Balance of Trade (BOT) is defined as:
A BOT (Balance of Trade) deficit occurs when:
The Balance on Invisibles covers which of the following?
In current account accounting, an export of goods or services is recorded as a:
In current account accounting, an import of goods or services is recorded as a:
