BANKING AFFAIRS

Detailed explanation-1: -Notes: The balance of payments is the record of all economic transactions between the residents of the country and the rest of the world in a particular period of time. It is categorised on the basis of current account or capital account or both.

Detailed explanation-2: -The Current account records all transactions involving goods, services, investment income, and current transfer payments. The Capital account shows the net change in ownership of foreign assets and transactions in financial instruments. The balance of payments account follows a double-entry system.

Detailed explanation-3: -The current account records the flow of goods and services in and out of a country (imports and exports). The capital account measures the capital transfers between U.S. residents and foreign residents. The financial account reflects increases or decreases in a country’s ownership of international assets.

Detailed explanation-4: -The balance of payments is comprised of current, capital and financial accounts. The current account depicts the effects of foreign transactions, such as the trade in goods and services, primary income and secondary income, on the national income and on the balance between savings and investments in the economy.

Detailed explanation-5: -The current account balance of payments is a record of a country’s international transactions with the rest of the world. The current account includes all the transactions (other than those in financial items) that involve economic values and occur between resident and non-resident entities.