With reference to Balance of Payments (Bo

• Statement A is correct. The Balance of Payments follows a double entry accounting system, where every transaction has a credit and a corresponding debit. In practice, receipts (foreign exchange inflows) are recorded as credits, and payments (outflows) are recorded as debits. • Statement B is correct. Exports of goods and services bring foreign exchange into the country, thereby reducing the demand for foreign currency. Hence, they are correctly recorded on the credit side of the BoP. • Statement C is incorrect. Transactions that increase demand for foreign currency—such as imports, foreign travel, outward remittances—require payment in foreign exchange, leading to an outflow. Such transactions are therefore recorded as debits, not credits. Conversely, transactions that reduce demand for foreign currency or bring in foreign exchange are recorded as credits. In BoP: • Credits = inflow of foreign exchange • Debits = outflow of foreign exchange