Question

Is it a credit or debit in the balance of payments accounts if: The U.S. sells $1 million worth of steel to German Builders

Answer 1

1.) The U.S. sells $1 million worth of steel to German Builders - It is a credit item in the U.S. balance of payments because it is an inflow of payment (the U.S. receives cash from German Builders)

2.) U.S. citizens spend $3 million on BMW's built in Germany - It is a debit item in the U.S. balance of payments because it leads to an outflow (the U.S. pays cash to Germany)

3.) German tourists spend $3 million in the U.S. - It is a credit item in the U.S. balance of payments (the U.S. receives $3 million from German tourists) 

4.) U.S. tourists spend $8 million in Berlin, Germany - It is a debit item in the U.S. balance of payments (the U.S. spends money so it is an outflow of cash)

5.) A German firm pays $1 million to a U.S. shipping line to transport cars to Germany - it is a credit item in the U.S. balance of payments (the U.S. receives cash of $1 million from a German firm)

Note: Credit items give rise to an inflow of payments (receiving cash) while debit items give rise to an outflow of payments (buying things or spending cash)

Hope this helps! :)