Question

State the basic rule of recording transactions in a balance of payments account.

Answer 1

1. We track and categorise every balance of payments transaction, including the import or export of items, based on the associated receipts and payments.
2.  Debits are payments paid by citizens of a nation to outsiders, and credits are payments received from foreigners.
3. According to the balance of payments, a credit item is one that allows a nation to get foreign currency, and a debit item is one that results in the usage or expenditure of foreign currency.