Management Notes

Reference Notes for Management

Balance of Payment (BOP) – Meaning, Features, Components and Importance | Economics

Balance of Payment (BOP)

Balance of Payment (BOP)

Balance of payments refers to the sum of all economic transactions between residents of the reporting country and residents of foreign countries during a specified period. All individuals, businesses, and government agencies are considered residents. A standard double-entry bookkeeping method is used to maintain the balance of payments record. Credits and debits are recorded for international transactions.

Imports, exports, and transfer payments, including foreign aid and remittances, are included in these transactions. As part of the complex mechanism of development, making sure the citizens are able to attain social and economic welfare, creating economic stability, and maintaining employment, these transactions play an important role.

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