For each of the following transactions, determine which U.S. account will be credited. a. The United...

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For each of the following transactions, determine which U.S. account will be credited. a. The United...

For each of the following transactions, determine which U.S. account will be credited.

a. The United States imports $100 million in clothing from China. China receives a financial payment.

Capital account
Financial account
Current account

b. British investors purchase $50 million in U.S. stocks and bonds for retirement accounts.

Financial account
Capital account
Current account

c. The United States exports $250 million in agricultural products to various nations, receiving a financial payment in return.

Capital account
Financial account
Current account

d. A German company purchases a trademark from a U.S. company, receiving a financial payment in return.

Current account
Capital account
Financial account

1. When does a trade deficit occur?

The balance of payments is negative.
Debits to the current account exceed the credits.
Credits to the financial account exceed the debits.
Credits to the current account exceed the debits.

2. Which of the following statements concerning a trade deficit is true?

Net exports are positive.
Imports exceed exports.
The domestic currency has appreciated.
The federal government holds a significant debt balance.

business accounting

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Answer 1

Answer #1

A. In case of import of good capital account will be Credited.

B. In case of investment financial account will be credited.

C. In case of Export of goods current account will be credited.

D. Sale of trademark lead to credit of capital account

1.Trade deficit occur when import exceed than export so we can say trade deficit occurred When Credit of current account exceed debit .

2. Trade deficit means when import exceed export.

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Answer 2

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