Question1

Using the double-entry accounting system, show how the following transactions will generate credits and debits in the Australian Balance of Payments (BoP) accounts. Please specify clearly which category (and sub-category) within the BoP accounts each credit or debit will appear. For example, a debit can appear in the Current Account, sub-category Goods.

(i) An Australian resident visits Japan and has dinner at a restaurant in Tokyo. He pays for the meal using his credit card issued by a bank in Australia.

(ii) An Australian firm imports footware products from Vietnam, paying by making a money transfer from its account at a commercial bank in Vietnam to the footware exporter's account with the same bank.

(iii) An Australian firm borrows money from a financial institution in the United Kingdom. The financial in stitution transfers money from its bank account held at a HSBC bank in London to the Australian firm's bank account at the same bank