Balance of payments (BOP),
Definition of Balance of payments (BOP):
The difference in total value between payments into and out of a country over a period.
The balance of payments (BOP), also known as balance of international payments, summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country. These transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances.
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.
Set of accounts that record a countrys international transactions, and which (because double entry bookkeeping is used) always balance out with no surplus or deficit shown on the overall basis. A surplus or deficit, however, can be shown in any of its three component accounts: (1) Current account, covers export and import of goods and services, (2) Capital account, covers investment inflows and outflows, and (3) Gold account, covers gold inflows and outflows. BOP accounting serves to highlight a countrys competitive strengths and weaknesses, and helps in achieving balanced economic-growth.
How to use Balance of payments (BOP) in a sentence?
- The balance of payments was double checked to ensure accurate reporting was taking place because we wanted to make a presentation to the board soon.
- If you want to know how much your company has spent through the year you will need to look through your balance of payments .
- A balance-of-payments deficit.
- The current account includes a nation's net trade in goods and services, its net earnings on cross-border investments, and its net transfer payments.
- The capital account consists of a nation's imports and exports of capital and foreign aid.
- The balance of payments include both the current account and capital account.
- If you want to figure out what your companies current finances are you will need to break down many things like your balance of payments .
- The sum of all transactions recorded in the balance of payments should be zero; however, exchange rate fluctuations and differences in accounting practices may hinder this in practice.
Meaning of Balance of payments (BOP) & Balance of payments (BOP) Definition