Question

Give the main features of Balance of Payments.

Answer 1

1. Systematic record: It refers to an organized record of a country’s income and expenditures in transactions with other nations.
2. Fixed period of time: It is a financial statement prepared for a specific duration, typically covering a period like one year.
3. Comprehensiveness: Comprehensiveness includes all three components: visible items, invisible items, and capital transfers.
4. Double-entry system: Receipts and payments are documented using the double-entry system.
5. Self-balanced: The double-entry system automatically ensures that the debit and credit sides of accounts remain balanced.
6. Adjustment of differences: Whenever a discrepancy exists between the actual total receipts and payments, it becomes necessary to make appropriate adjustments.