Multiple choice

A transaction that results in change in asset or liability position outside India of a person resident in India or position in India of a person resident abroad is called

  1. current account transaction

  2. balance of payment

  3. capital account transaction

  4. trade balance
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Capital account transaction is defined as a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India. In other words, it includes those transactions which are undertaken by a resident of India such that his/her assets or liabilities outside India are altered (either increased or decreased).

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