Australians donating to a charity in the UK would be recorde

Australians donating to a charity in the UK would be recorded as a(n) ________ on the current balance.

Select one:

a. offsetting item in the current account

b. balancing item in the current account

c. debit item in the current account

d. credit item in the current account

Solution

Current Account keeps in account the transactions related to imports, exports of goods and services and unilateral transfers. Receipts from the export of goods and services and unilateral receipts are recorded as credit in the current account and payments for imports of goods and services and unilateral payments are recorded as debit in the current account. Thus when Austrailians are donating to a charity in the UK, it is simply referred to as unilateral payments and is recorded as debit in the current account.

c. debit item in the current account.