Question : In the Balance of Payments, a credit entry represents:
Option 1: An inflow of foreign exchange
Option 2: An outflow of foreign exchange
Option 3: A surplus in the capital account
Option 4: A deficit in the financial account
Answer (1)
22nd Jan, 2024
Correct Answer: An inflow of foreign exchange
Solution : The correct answer is a) An inflow of foreign exchange.
In the context of the Balance of Payments, credits and debits are used to record financial transactions. A credit entry indicates an inflow of foreign exchange into the country. It represents a positive entry or an increase in a specific account.
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