ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In macroeconomics and international finance, the capital account, also known as the capital and financial account records the net flow of investment transaction into an economy. It is one of the two primary components of the balance of payments, the other being the current account.

Detailed explanation-2: -The funds for capital investment can come from a number of sources, including cash on hand, though big projects are most often financed through obtaining loans or issuing stock. Examples of capital investments are land, buildings, machinery, equipment, or software.

Detailed explanation-3: -In accounting, a capital account is a general ledger account that is used to record the owners’ contributed capital and retained earnings-the cumulative amount of a company’s earnings since it was formed, minus the cumulative dividends paid to the shareholders.

Detailed explanation-4: -The components of the capital account include foreign investment and loans, banking, and other forms of capital, as well as monetary movements or changes in the foreign exchange reserve. The capital account flow reflects factors such as commercial borrowings, banking, investments, loans, and capital.

Detailed explanation-5: -The main components that are a part of the capital account include banking, foreign investment, loans, and other capital or monetary movements in the foreign exchange reserve. The capital account flow reflects the factors like commercial borrowings, investments, loans, banking and capital.