Check sibling questions

It is an economic record of transactions

in Goods, Services and Asset

between

Residents of Country

and

Rest of World

in an Accounting year

Different Transactions in Foreign Trade - Teachoo.JPG

What is Balance of Payment - Teachoo.JPG

Resident -------------------> Rest of World

 

Important Points

It covers both goods and services

Only Economic Transactions covered (it should involve money)

Important Points about Balance of Payment - Teachoo.JPG

Amt Received from foreign countries are credited (shown as positive figure)

Amt paid to Foreign Countries are Debited (shown in negative)

Bill of Payment follows Double Entry System - Teachoo.JPG

Debt and Credit of  Different Transactions in Balance of Payment Example - Teachoo.JPG

It has 2 type of account - Capital Account and Current Account

Types of Accounts in Balance of Payment - Teachoo.JPG

Types of Accounts in Balance of Payment

It has 2 types of account

Current Account

Capital Account

 

Current Account covers

Export Import of Goods

Export Import of Services

Unilateral Transactions

 

Capital Account covers

International transaction of assets or liabilities

 

NCERT Questions

No questions in this part

Other Books

Question 1

In the following questions, select the correct answers:

An accounting statement that provides a systematic record of all the economic

transactions, between residents of a country and the rest of the world is ____.

  1. Balance of Payment
  2. Balance of Trade
  3. Government Budget
  4. None of these
View Answer

Question 2

Balance of Payment is a ___ concept.

  1. Stock
  2. Flow
  3. Both A and B
  4. Neither A nor B
View Answer

Question 3

Inflow of foreign exchange is recorded on the ____ side.

  1. Credit
  2. Debit
  3. Either A or B
  4. Neither A nor B
View Answer

Question 4

Which of the following is a component of Balance of Payment?

  1. Current account
  2. Capital Account
  3. Nominal Account
  4. Real Account
View Answer

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Transcript

Different Transactions in Foreign Trade Transaction in Goods India Export Steel China India Import Mobile China Transaction in Services India Export IT Service USA India Legal Service UK Transaction in Assets India Deposit Money Swiss Banks Indian Company Investment Foreign Investor What is Balance of Payment? We know that There are Different Transactions in Foreign Trade Transaction in Goods Transaction in Services Transaction in Assets Record of these is kept in Balance of Payment What is Balance of Payment? It is an economic record of transactions in goods, services and asset between Residents of Country And Rest of World in an accounting year Important Points about Balance of Payment It covers only Economic Transactions Different Types of Transactions Economic Transactions Non -Economic Transactions Transactions providing Economic Value Transactions not having Economic Value Example Import Export Investment Loan Example USA President visited India Agreement signed between France &India Only these shown in BOP These not shown in BOP Bill of Payment follows Double Entry System It shows both Receipts and Payments Which are Credited and Debited respectively Receipts (Inflow) it covers Money Received from Different foreign Trade transactions Example Export of Goods Export of Service Investment Rec Loan Taken They are Credited In BOP Payments (Outflow) it covers Money Paid for different foreign Trade transactions Example Import of Goods Import of Service Investment Made Loan Given They are Debited in BOP Debt and Credit of Different Transactions in Balance of Payment -Example Transaction in Goods Import of Goods Export of Goods Inflows/ Outflows Outflows Inflows Debited/ Credited Debited Credited Transaction in Services Import of Service Export of Services Inflows/ Outflows Outflows Inflows Debited/ Credited Debited Credited Transaction in Assets Investment Made Outside India Loan taken from Outside India Inflows/ Outflows Outflows Inflows Debited/ Credited Debited Credited Types of Accounts in Balance of Payment Current Account Capital Account It records trade of goods, services and transfer payments It records International transaction of assets or liabilities Example Export Import of Goods/Services Gift/Donation Received paid Outside Country Salary Received/Paid outside country Example Loan taken from outside Country Loan given Outside country Investment Made in Foreign Assets Note-This is called BOP Classification

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