“The Balance of Payments is a systematic records of all economic transactions

between residents of the reporting Country & residents of foreign countries.“

 


             
 

statement or record of the character and dimensions of the country’s e 
                

              

              

             
The Balance of Payment account serves another purpose. The balance of Country’s foreign
 

 
to Sodersten,”t            
transactions for a country”

                

 
the world. In ‘barter trade’, goods are exchanged for goods and in some cases assets are

            
              
             
          
  
ed in a ‘Double entry book keeping principle’. Under such principle each transaction
is the balance of payments is entered as a Credit or a Debit entry. A ‘Credit entry’ in Balance of
 
rest of the world. Similarly a ‘Debit entry’ Balance of Payments refers to an outflow or that
                  







 







 
               


 
             








  
                 
  
                 
               
  
                
                




             

             






 



    






 




 



 

 
  

 
  
 
 
 

 

 
  

 




            
             
            
      


               


                 
      


    
               


be lesser than the inflow. If Debit balance = Credit balance then we can say that the nation’s


   



              

               
           


                
commodities’ and Invisibles part of Services’. The net of exports and import of visibles in
              
              
          


 
 
              




             
              
            
 

              









 
              
               





               
 – 

           


                 
              
 
 

 


appear as a debit item in country’s balance of payments and capital inflows as credit 







              

              

               






              
       
The changes in the country’s reserves must reflect he net value of all the other recorded items in
               
            





 


 