Hi, Can anyone solve this Accounting Questions with Explanations? 3. Assume that

Question

Hi, Can anyone solve this Accounting Questions with Explanations?

3. Assume that the US resident uses his 112,000 JPY to purchase a camera from a store in Japan and then brings it back to the US. The transaction can be recorded by noting the following (for the US): (a) +$1.000 Financial account, -$1.000 Capital account. (b) +$1.000 Financial account, -$1.000 Current account (c) +$1.000 Current account, -$1.000 Financial account. (d) +$1.000 Financial account, -$1.000 Financial account. (e) +$1.000 Capital account, -$1.000 Financial account.

Explanation / Answer

b, +$1 Financial account, -$1 Current account
The financial account has two main subaccounts. The first is domestic ownership of foreign assets. If this increases, it adds to the financial account

Current account is Excess of Assets over liabilities, as currency is a asset when purchasing an asset it gets reduces.

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