Question

calculate the value of Net Value Added at Factor Cost (NVAFC):

S. No.	Particulars	Amount (In ₹ crore)
(i)	Operating Surplus	3,740
(ii)	Increase in unsold stock	600
(iii)	Sales	10,625
(iv)	Purchase of raw materials	2,625
(v)	Consumption of fixed capital	500
(vi)	Subsidies	400
(vii)	Indirect taxes	1,200

• A. Export of goods and services are recorded as credit items.
• B. Import of goods and services are recorded as debit items.
• C. All transfer payments are recorded as debit items.
• D. All transfer receipts are recorded as debit items.

Hint:

In BOP accounting: Exports and transfer receipts are credit items, while imports and transfer payments are debit items.

Answer 1

The Correct Option is D

Within the Balance of Payments (BOP) Current Account, the export of goods and services are classified as credit entries due to their role in attracting foreign exchange into the nation. Conversely, the import of goods and services are designated as debit entries because they necessitate an outflow of foreign exchange. Likewise, outbound transfer payments such as gifts, donations, and remittances are treated as debit items reflecting monetary outflows. In contrast, inbound transfer receipts are categorized as credit items, signifying monetary inflows from foreign sources. Consequently, statement (D) is identified as incorrect.