Practicing Success
Indian Real Estate Company receives rent from Microsoft from London. This transaction will be recorded in _____ Account. |
Credit side of current account Debit side of current account Credit side of capital account Debit side of capital account |
Credit side of current account |
As there is inflow of currency it means it will be on the credit side of the account. Now, the question is whether it will be in the capital account or current account. Capital account records all the transaction which affects the assets and liabilities of the countries. Whereas, current account records all the transactions of good and services and which are recurring in nature and do not affect the assets or liabilities status of the country. Thus, rent received from Microsoft, London will be recorded on the credit side of current account as there is no impact on the assets or liabilities of the country due to this. |