FNCE-404 Study Guide - Midterm Guide: Accounts Receivable, United States Treasury Security, Inverse Relation
9 Aug 2016
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Balance of payments: the measurement of all international economic transactions that take place between the residents of a country and foreign residents. Ex: export of merchandise (trucks, machinery, computers, telecommunications equipment), imports (japanese cameras, german automobiles, french wine. View as a cash flow statement by capturing all international transactions over a period of time. 2 types of business transactions: exchange of real assets. The exchange of goods (automobiles, computers, textiles) and services (banking, consulting, and travel services) for other goods and services or for money: exchange of financial assets. The exchange of financial claims (stocks, bonds, loans, and purchases or sales of companies) for other financial claims or money. The accounts of the balance of payments. 3 major subaccounts: the current account, the capital account, the financial account, official reserves account = tracks government currency transactions, statistical subaccount = the net errors and omissions account. Includes all international economic transactions with income or payment flows occurring within the year.
