Balance of Payments | Balance of Trade | Difference in Balance of Payment and Balance of Trade
Balance of Payments | Balance of Trade | Difference in Balance of Payment and Balance of Trade Balance of Payment Balance of payment shows the total economic transactions between a country and the rest of world and it includes transactions between visible goods and invisible goods in a given year. Structure of Balance of payment: The balance of payment account of a country is constructed on the basis or on the principle of double book keeping. Each transaction is entered on the credit show on the left side and debit on the right side. The credits and debit items are shown vertically in the BOP account of a country. Horizontally they are divided into three categories which are as follows: a) The Current Account covers the transactions other than those in financial items that involve economic values and occur between resident and nonresident entities. b) The Capital Account mainly covers capital transfers and acquisition / disposal of non ...