Question

Some transactions undertaken in 2018 by the country of Moyes with the rest of the world are shown below. The currency of Moyes is the Moyes marks-
BM
( i ) A French retail chain has imported 50,000 BM worth of wine from Moyes. The goods were invoiced in euros.
( ii ) Citizens of Moyes spent 30,000 BM abroad on hotel bills and 20,000 BM on souvenir purchases.
( iii ) A British company sold a radar, worth 10,000 BM to the army of Moyes. The radar was priced in pound sterling.
( iv ) As part of its portfolio diversification strategy, the National Pension Fund of Moyes purchased 15,000 BM worth of shares on the Tokyo Stock Exchange.
( v ) Bino Ltd received 25,000 BM worth of dividends from the investments it holds in a US company

Required:
Classify in Debit/Credit form, these transactions as sub-components of the current account or capital/ financial account.

Answer 1

			Currency: BM
	Sr No.	Account Name	Debit	Credit	Account Type
	(i)	Bank A/c	50000		Current Account
		To Sales revenue A/c		50000	Current Account
		(Being French retail chain has imported 50,000 BM worth of wine from us, Moyes)
	(ii)	Hotel Expenses A/c	30000		Current Account
		Souvenir Expenses A/c	20000		Current Account
		To Bank a/c		50000	Current Account
		(Being Citizens spent 30,000 BM hotel & 20,000 BM on souvenir purchases)
	(iii)	Radar A/c	10000		Capital Account
		To Bank a/c		10000	Current Account
		(Being radar, worth 10,000 BM purchased by the army of Moyes)
	(iv)	Investment in Shares A/c	15000		Capital Account
		To Bank a/c		15000	Current Account
		(Being purchased 15,000 BM worth of shares on the Tokyo Stock Exchange)
	(v)	Bank a/c	25000		Current Account
		To Dividend on Investment A/c		25000	Current Account
		(Being received 25,000 BM worth of dividends from the investments it holds in a US company)