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What does mean by balance of payment?

What does mean by balance of payment?

Course: M.Com

1 Answer

Balance of payment means an accounting statement that summaries all the economic transactions between the residents of the home country and the residents of all other countries during a given period of time. Balance of Payment Account shows classified record of all receipts on account of goods exported, services rendered and capital received by a country and payments made by that country on account of goods imported, services received from and capital transferred to foreigners.

Following are the components of Balance of Payment Account:

  • Export and import of commodities.
  • Services rendered and received.
  • Unrequited receipts and payments.
  • Capital receipts and payments.

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November 13, 2018