A French investor sells $200,000 worth of stock in a U.S.company and puts the proceeds into a bank in the United States.In the U.S.balance of payments,the sale of stock is recorded as a ______ to the ________ account; the bank deposit is recorded as a a ______ to the ________ account.
A) credit, financial; debit, financial.
B) debit, financial; credit, financial.
C) credit, financial; debit, current.
D) debit, financial; debit, current.

Question

Quizplus · Accepted Answer

The sale of stock represents a capital outflow from the United States, which is recorded as a debit to the financial account. The subsequent deposit of funds in a U.S. bank represents an increase in U.S. assets, which is recorded as a credit to the financial account. Thus, the correct answer choice is B. Option A is incorrect because the deposit is not recorded as a debit. Option C is incorrect because the deposit is not recorded as a debit to the current account. Option D is incorrect because it implies that both transactions should be recorded on the same account, which is not the case.

A French Investor Sells $200,000 Worth of Stock in a U.S.company