Balance of payment

• Set of accounts that record a country's

international transactions, and which (because
double entry bookkeeping is used) always
balance out with no surplus or deficit shown
on the overall basis.
• Example-When residents of the home country
receive income from foreigners, that income is
recorded as a credit, while income payments
to foreigners are recorded as debits
s
• For example, if Americans buy automobiles
from JAPAN, and have no other transactions
with Japan, the Japanese must end up holding
dollars, which they may hold in the form of
bank deposits in the United States or in some
other U.S. INVESTMENT.