Question

Match List-I with List-II:

List-I (Elements)		List-II (Features)
A	Annual Financial Statement	(I)	Create liabilities or reduce financial assets
B	Capital Receipts	(II)	Trade surplus
C	Capital Payment	(III)	Main budget document
D	Export \(>\) Import	(IV)	Create financial assets or reduce liabilities

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Answer 1

The Correct Option is D

Annual Financial Statement is the main budget document, capital receipts create financial assets or reduce liabilities, and capital payments create liabilities or reduce financial assets.

Answer 2

The Annual Financial Statement is the primary document presented by the government as part of its annual budget. It outlines the government's estimated receipts (income) and expenditures for the upcoming financial year. This document serves as the foundation for fiscal planning, providing transparency and guiding economic policy decisions.

Capital receipts refer to funds that the government receives from non-recurring sources, such as loans, borrowings, or the sale of assets. These receipts have the unique characteristic of either creating financial assets or reducing the government's liabilities. For instance, when the government borrows money, it creates a liability, but when it sells public assets, it generates financial assets that can be used for other investments or purposes.

On the other hand, capital payments refer to government expenditures that either create liabilities or reduce financial assets. For example, when the government repays a loan, it reduces liabilities. Similarly, if the government spends on capital projects, it may either reduce its financial reserves or create long-term liabilities through debt. These payments are typically associated with long-term investments, such as infrastructure development or purchasing assets for public use.