CA Foundation Exam June 2023 » CA MCQs » Payment of the Balance Due (BOP)

Payment of the Balance Due (BOP)

MCQs on "Payment of the Balance Due (BOP)": Find the multiple choice questions on "Payment of the Balance Due (BOP)", frequently asked for all competitive examinations.

The balance of payment is the financial statement that documents all transactions between entities, government agencies, and individuals between nations over a specific time. The statement contains all transaction information, which provides the authority with a complete picture of the money flow.

Indeed, it is reasonable to believe that the fund’s intake and outflow will be constant, provided the items are included in the statement. A country’s balance of payments reflects whether it has an excess or a funds deficit. Comparing the two data indicates if a country’s exports exceed its imports or vice versa.

Multiple Choice Questions

1. The Balance of Payments is a critical accounting statement since it summarizes monetary transactions between two businesses.

    1. Residents of a country and visitors from other regions of the world
    2. includes non-residents and the rest of the globe.
    3. Residents of a country and non-citizens
    4. None of the preceding options

Answer: A is the appropriate response.

2. The Balance of Payments is calculated using the _______ accounting system.

    1. Entrances with a single door
    2. Two-entry
    3. In cash
    4. Accrual accounting

Answer: The correct answer is B.

3. The term “resident” refers to an individual whose financial transactions are recorded by the Balance of Payments system. This phrase encompasses.

    1. Governmental bodies
    2. Individuals 
    3. Businesses
    4. The foregoing

Answer: The correct answer is D.

4. A Balance of Payments account is composed of the following components:

    1. Capital Account
    2. Accounts Receivable and Payable
    3. Both alternatives a and b are correct.
    4. None of the preceding options

Answer: The correct answer is c.

5. On the _____ day of the week, the foreign exchange inflow is reported in the Balance of Payments account.

    1. On the debit side of the ledger
    2. The creditor’s point of view
    3. Both alternatives a and b are correct.
    4. None of the preceding options

Answer: The correct answer is B.

6. “Balance of trade” is a word that refers to the.

    1. Define the terms “service export” and “service import.”
    2. The total value of exported and imported services
    3. The contrast between product export and import
    4. The total value of exports and imports of goods

Answer: The correct answer is C.

7. Which of the following is not included in the Balance of Payments? 

    1. A valid bank account
    2. Receivables and payables
    3. Account de capital (sometimes spelled capital account)
    4. None of the preceding options

Answer: A is the appropriate response.

8. The terms “import” and “export” allude to the flow of goods.

    1. Nomenclature of trade
    2. The unseen trade
    3. Visible commerce
    4. None of the preceding options

Answer: The correct answer is C.

9. “________” is a term that relates to the import and export of services.

    1. Nomenclature of trade
    2. The unseen trade
    3. Visible commerce
    4. None of the preceding options

Answer: The correct answer is B.

10.Imports of machinery and equipment are recorded in the ______ account of the general ledger.

    1. Credit-related capital
    2. On the negative side of the ledger, the capital
    3. On the debit side, the current account balance
    4. From a credit standpoint, the present

Answer: The correct answer is C.

11. The ________ account is used to track gifts and contributions from outside the country. 11.

    1. Credit-related capital
    2. On the negative side of the ledger, the capital
    3. On the debit side, the current account balance
    4. From a credit standpoint, the present

Answer: The correct answer is D.

12. These are instances of transactions included in the Balance of Payments current account.

    1. International trade in goods and services
    2. International transfers to and from other countries
    3. Revenues earned in and remitted to other nations
    4. The foregoing

Answer: The correct answer is D.

13. Thirteenth, the Capital account of the Balance of Payments includes the following transactions.

    1. Changes in the country’s foreign exchange reserves
    2. Direct foreign investment (both into and out of the country)
    3. International borrowings and loans
    4. The foregoing

Answer: The correct answer is D.

14. In comparison to the balance of trade concept, the balance of payments is a _________ concept. 15.

    1. More inclusive
    2. Comparable
    3. Slightly narrower
    4. None of the preceding options

Answer: A is the appropriate response.

15. When there is a ____________ in the economy, a trade deficit emerges.

    1. The value of commodities exported is less than the value of imported items.
    2. Commodities are exported at a higher rate than they are imported.
    3. The value of exported services is less than the value of imported services.
    4. The value of exported services surpasses the value of imported services.

Answer: A is the appropriate response.

16. A commercial organization created in India by a foreign-based corporation is granted a loan. In the English language, India’s Balance of Payments account contains a record of this transaction, which is named “________ of____________.”

    1. On the debit side, the current account balance
    2. From a credit standpoint, the current
    3. On the negative side of the ledger, the capital
    4. Credit-related capital

Answer: The correct answer is D.

17. A corporate entity situated in India invests in a foreign enterprise. In the English language, India’s Balance of Payments account contains a record of this transaction, which is named “________ of____________.”

    1. On the debit side, the current account balance
    2. From a credit standpoint, the current
    3. On the negative side of the ledger, the capital
    4. Credit-related capital

Answer: The correct answer is C.

18. ______ Transactions are unrelated foreign exchange transactions in the Balance of Payments account.

    1. The capital account
    2. Receivables and payables
    3. Convenient
    4. Self-sufficient

Answer: The correct answer is D.

19. ________ transactions are classed as foreign exchange transactions that are dependent on other account operations in the Balance of Payments account.

    1. The capital account
    2. Receivables and payables
    3. Convenient
    4. Self-sufficient

Answer: The correct answer is C.

20. When foreign exchange payments exceed foreign exchange revenues, the balance of payments is 

    1. Excess
    2. Deficiency
    3. Equilibrium
    4. None of the preceding options

Answer: The correct answer is B.

21. The transactions carried out to compensate for the deficit or surplus caused by autonomous transactions are referred to as – 

    1. Facilitating transactions
    2. Capital account transactions
    3. Current account transactions
    4. None of the preceding options

Answer: A is the appropriate response.

22. The introduction is one of the methods done to improve the negative balance of payments.

    1. Exchange control
    2. Currency depreciation
    3. Import substitution
    4. The foregoing

Answer: The correct answer is D.

23. The Balance of Payments account’s ______ section is used to reflect an increase in the foreign exchange reserve.

    1. On the debit side of the ledger
    2. The creditor’s point of view
    3. Does not appear on any of the sides
    4. It is suitable for usage on either side of the table.

Answer: The correct answer is B.

24. Twenty-fourth, which of the following is included in the Balance of Payments’ Capital account:

    1. International loans
    2. Currency fluctuations
    3. Direct foreign investment
    4. The foregoing

Answer: The correct answer is D.

25. The Balance of Payments is an accounting statement used to determine a business’s financial health.

    1. The Gregorian calendar year
    2. The start of a new year
    3. Fiscal year
    4. The foregoing

Answer: The correct answer is C.

26. Current account deficits are unfavourable for a country since they suggest that it is experiencing.

    1. Advantages for the country
    2. The term “borrowing” refers to a country’s debt to the rest of the world.
    3. The government lacks sufficient foreign currency to meet its international payment obligations.
    4. Both alternatives b and c are correct.

Answer: The correct answer is D.

27. Interest generated on deposits with a foreign bank is shown in the current account due to the fact that it is a.

    1. A transfer receipt
    2. A source of revenue received from outside the country
    3. An oblique service
    4. A visible object.

Answer: The correct answer is B.

28. The balance of payments is said to be ___________ if the value of visible exports exceeds the value of invisible imports.

    1. International trade deficit
    2. Account de capital (also known as a capital account or a capital account)
    3. Accounts due and receivable
    4. There is no way to determine

Answer: The correct answer is D.

29. If the sum of visible imports exceeds the sum of invisible exports, the balance of payments is said to be in deficit.

    1. International trade deficit
    2. Account de capital (also known as a capital account or a capital account)
    3. Accounts due and receivable
    4. There is no way to determine

Answer: The correct answer is D.

30. If a country has a trade deficit of Rs. 1000 crores and imports products of Rs. 2000 crores, the country’s exports will be worth Rs.

    1. Rs. 2000 billion
    2. One thousand billion rupees
    3. Rs. 1500 billion
    4. Rs. 500 billion

Answer: The correct answer is B.

31. Which one of the following is not a component of the capital account in the balance of payments?

    1. Foreign investment
    2. Foreign loans
    3. Monetary movements
    4. The foregoing

Answer: D is the correct answer.

32. Unilateral is classified as follows:

    1. Capital Account
    2. Current Account
    3. Balance of Trade Account
    4. The Payment Account’s balance and the Current Account’s balance

Answer: D is the correct answer.