Question

Indicate how each of the following transactions will be recorded in the Jordanian Balance of Payments.

Classify each transaction as either a credit or debit in the current account or the financial account.

Determine the subcategory of each transaction within the account.

1. A Japanese automobile manufacturer pays the salary of its managers working for a subsidiary in Jordan.

2. A Jordanian tourist pays for a hotel in Istanbul with his American Express card.

3. A Jordanian professor goes abroad for a year and lives on a scholarship from Qatar.

                  4. The Japanese government sells dollars to the Jordanian central bank to buy yen.

                  5. A Jordanian company buys a new delivery truck from a Spanish company.

6. A U.S.-based insurance company buys Jordanian corporate bonds for its portfolio.

7. The Jordanian government hires a British salvage company to lift a drowned ship.

8.   A Jordanian multinational firm buys insurance from a London insurance broker.

9.   A Jordan-based mutual fund buys stocks on the Dubai and New York stock exchanges.

10. A Jordanian resident buys a euro-denominated bond from a German company.

11. A Jordanian Company imports Lebanese oranges, paying with dollars on deposit in London.

                  12. A British firm in Amman buys computers from a subsidiary in London.

(hint: use the following table next page to answer the question)

Transaction	Credit or Debit	Current or Financial Account	Subcategory
1
2
3
4
5
6
7
8
9
10
11
12

Answer 1

1) credit in jordanion economy under financial account.(investment)

2) debit, financial account (forex reserves)

3) credit, financial account( foreign exchange )

4) credit, financial account( investment)

5) debit, current account( trade in goods)

6) credit, financial account( foreign portfolio investment)

7) debit, current account( payment to services hired)

8) debit, financial account( portfolio investment)

9) debit, financial account( portfolio investment)

10) debit, financial account(portfolio investment)

11) debit, current account( trade in goods)

12) debit, current account ( trade in goods)