Question

In: Accounting

When central banks publish data about BOP, what other analytical data do central banks present?

When central banks publish data about BOP, what other analytical data do central banks present?

Solutions

Expert Solution

The balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.

The balance of payments divides transactions in two accounts: the current account and the capital account.It summarizes all payments and receipts by firms, individuals, and the government. The transactions can be both factor payments and transfer payments.

Current account records all transactions involving goods, services, investment income Investing: and current transfer payment. 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. All receipts are entered on the credit whereas all payments are entered on the debit side.

Central banks present international investment position (IIP) data of individual countries with BOP.


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