Question

What is a balance of payment? Give an example

Answer 1

The balance of payments (BOP) is the bookkeeping or accounting of a country’s global exchanges for a specific time frame period. Any exchange that makes cash flow into a nation is a credit for its BOP account, and any exchange that makes cash stream/flow out is a debit.

For instance, when a nation trades 20 red automobiles to another country, a credit is made in the balance of payments account.

Also see:

• Balance of Trade Vs Balance of Payment
• Types of Balance of Payment
• Balance of Payments Formula