What are the main characteristics of balance of payments ?

1.	What are the main characteristics of balance of payments ?
Answer» Main characteristics of ‘ Balance of Payments ‘ are : (1) Systematic Record - It is a record of payments and receipts of a country related to its import and export with other country. (2) Fixed Period of Time – It is an account of a fixed period of time generally a year. (3) Comprehensiveness – It includes all types of visible items, invisible items and capital transfers. (4) Double Entry system – Payments and receipts are accounted on the basis of double entry system. (5) Self – balanced – Double entry system itself keeps balance of payments as balanced. (6) Adjustment of differences – Whenever difference arises between total receipts and payments, This disequilibrium needs to be adjusted.

Answer»

Main characteristics of ‘ Balance of Payments ‘ are :

(1) Systematic Record - It is a record of payments and receipts of a country related to its import and export with other country.

(2) Fixed Period of Time – It is an account of a fixed period of time generally a year.

(3) Comprehensiveness – It includes all types of visible items, invisible items and capital transfers.

(4) Double Entry system – Payments and receipts are accounted on the basis of double entry system.

(5) Self – balanced – Double entry system itself keeps balance of payments as balanced.

(6) Adjustment of differences – Whenever difference arises between total receipts and payments, This disequilibrium needs to be adjusted.

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