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What is the relationship between capital account balance and current account balance?
The balance of payments, then, is the sum of the balance on current account and the balance on capital and financial account. It is important to understand that the deficit indicated by the current account is financed through activities recorded on the capital and financial account. The deficit on the current account must be exactly offset by the surplus on the capital and financial account (if it is not, net errors and omissions will correct it). This means then that the sum of the current account and the capital and financial account is equal to zero.
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What is a basic balance?
A basic balance is the net balance of the combination of a current account and a capital account in a balance of payments.
In economics what is a capital account?
A capital account in economics, is one of two primary components, the balance of payments, and the current account. The current account reflects the nation's net income, and the capital account reflects the net change in the national ownership of assets.
How differ the balance of trade from the balance of payments?
The Balance of Payments (BoP) is comprised of the Current Account, as well of the Capital and Financial Account. Within the Current Account, one will find a subcategory called Goods. The Balance of Trade is a term used to show the difference between Imports (IM) and Exports (X) within the Goods Category. This is also known as Net Exports.
What is the balance of payment formula?
by checking the dollor rate we can solve it .
If the Balance of payment always always balances then why you have deficit in the balance of payment What measure can be government take to address an in-balance in the Balance of payment?
when they are talking about the deficit or surplus they are usually only talking about the current account. The balance of payments will balance because the other accounts in it (Capital, financial and erros and ommissions) will account for the other parts eg if current account has defiecit of 100m the capital, financial and erros and ommisions will have a surplus of 100m
Why is a capital account has credit balance?
The normal balance in a capital account is a credit. Capital is a balance sheet account. Assets = Liabilities + Capital
What is the normal balance of a additional paid-in capital account?
Additional Paid-in Capital is a normal credit balance account.
What is the normal balance of a capital account?
Capital account has credit balance as a normal balance of account as it is the amount company requires to return back to it's owner at the time of liquidation.
What is a basic balance?
A basic balance is the net balance of the combination of a current account and a capital account in a balance of payments.
Distinguish between Current account and capital account?
A current account is the balance of net transfers, trade in goods, net investment income from external assets and trade in services. A capital account shows the outflows and inflows of different forms of capital.
Collect data on India's current account balance capital account balance and forex reserves for the period 2001-2006?
Collect data on India's current account balance capital account balance and forex resevers for a period 2001-2006?
Why drawing balance is debit?
Drawings account is contra account for reducing the owners capital account and as capital account is credit so contra account should be debit so that it can use to reduce the balance from owner’s capital.
What are India's account balances and major features of their account balance and capital account balance and Forex reserves for 2001 to 2006?
1. capital account balance and forex reserves for the period 2001-2006 and list the major features.
Is an increase in Capital Stock a credit in the normal balance of an account?
Yes capital stock has credit balance as a normal balance so increase is also has credit balance.
Is additional capital will enter in the profit and loss appropriation account?
Additional capital is shown under capital account of balance sheet and not shown in profit and loss appropriation account.
The year-end balance of the owners capital account appears in?
The year-end balance of the owners capital account appears in owners equity.
What happens to balance on drawings account at the end of accounting year?
Balance of drawing account is write off against owners capital at the end of fiscal year. Journal entry is as follows: [Debit] Owners capital [credit] Drawings account
