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Monday, July 20, 2020 | History

2 edition of What is the accommodating item in the balance of payments? found in the catalog.

What is the accommodating item in the balance of payments?

David Chaundy

What is the accommodating item in the balance of payments?

by David Chaundy

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  • 38 Currently reading

Published by ESRC Centre for Business Research, University of Cambridge in Cambridge .
Written in English


Edition Notes

StatementDavid Chaundy.
SeriesWorking paper series / ESRC Centre for Business Research, University of Cambridge -- no.122, Working paper series (ESRC Centre for Business Research, University of Cambridge) -- no.122.
ContributionsESRC Centre for Business Research.
The Physical Object
Pagination24p.
Number of Pages24
ID Numbers
Open LibraryOL18356752M

“A receipt and payment account is a summarized cash book for a given period”.”This is a summary of the cash transactions as in the cash book”. Non-profit organizations prepare receipt and payment account at the end of the year. With the help of this account and some additional information, we prepare income and expenditure account to disclose the true results of non-profit organizations. The starting checkbook balance is not equal to the last reconciled balance. A deposit is saved. However, the deposit is not posted. The transaction was edited in a financial batch before it was posted to the general ledger. The same cash account was debited and credited. In this situation, the checkbook balance is updated.

  The adjusted bank statement balance (5,) is now equal to the adjusted cash book balance (5,), so the bank reconciliation is complete. The process is summarized in the diagram below. Look at the cash book payments and find the corresponding item on the bank statement. Place a tick against both the cash book and bank statement item. This offer applies only to qualifying new products sold and shipped by and qualifying new or certified refurbished Amazon devices sold and shipped by Amazon Digital Services, including where the "monthly payments" option is available on the product detail page.

  Above the line items’ in balance of payments refer to autonomous as well as accommodating items. ‘Below the line items’ in balance of payments are undertaken with a view to maximising profits. Describe the balance of payments identity and discuss its implications under the fixed and flexible exchange rate regimes. Answer: The balance of payments identity holds that the combined balance on the current and capital accounts should be equal in size, but opposite in sign, to the change in the official reserves: BCA + BKA = -BRA.


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What is the accommodating item in the balance of payments? by David Chaundy Download PDF EPUB FB2

(b) Accommodating items in BOP: These refer to transactions that take place to cover deficit (or surplus) arising from autonomous transactions.

These items are also called ‘below the line items’. Because of government financing, official settlements are seen as accommodating items. Autonomous Items in BOP-Autonomous items refer to international economic transactions that take place due to some economic motives like earning income and profit transactions are independent of the state of country’s balance of payment.

These items are generally called ‘above the line items’ in BOP again, it is autonomous transactions which make deficit or surplus in BOP. Sodersten has defined the accommodating flows in these words.

These are the capital flows that take place specifically to equalize the balance of payments in the book-keeping sense. These transactions result from and are needed to balance the international transactions. Downloadable. Balance of payments accounts are constructed using a double-entry accounting principle such that total credits equal total debits.

Modelling each entry independently will not guarantee this equality. It is therefore important to identify the counterpart entries or 'accommodating' items that ensure that total credits equal total debits.

Accommodating items reflect government actions aimed at altering the size and the composition of the balance of payments, and they are sometimes referred to as below the line items. Related Questions.

Accommodating transactions are compensating capital transactions which are meant to correct the disequilibrium in autonomous items of balance of payments.

For example, if there is a current account deficit in the BOP, then this deficit is settled by capital inflow from abroad. Balance of Payment – CBSE Notes for Class 12 Macro Economics Introduction This chapter gives a detailed account of balance of payment of an economy, it structure and categorisation into current and capital account.

Thereafter explaining balance of trade and its differences with the balance of payment, autonomous items, accommodating items and their differences. [accommodative capital flows] take place only because the other items in the balance of payments are such as to leave a gap of this size to be filled [while] autonomous payments take place regardless of other items in the balance of payments.

Strictly, this distinction makes sense in fixed exchange rate regimes. Autonomous items in BoP accounts are often referred to as 'above the line items'. Accommodating Items: These are those items of Balance of payments (BoP) accounts: Which are not related to such transactions as are determined by considerations of profit.

Which are conditioned by the positive or negative BoP status of the country. “Accommodating items on the other hand are determined by the net consequences of the autonomous items, according to Sodersten and Reed. They are in the official reserve account. They are compensating (induced or accommodating) short-term capital transactions which are meant to correct disequilibrium in the autonomous items of balance of payments.

We can say that the item reserve assets of the SNB is the accommodating item in the balance of payments. This entry was posted in Uncategorized and tagged balance of payments on June 8,pm by V. Ramanan. Accommodating Items or ‘below the line items’ are those which originate to ‘accommodate’ the BOP scenario.

If there is BOP surplus or deficit then accommodating transactions are carried out in a deliberate manner to balance out the surplus/ deficit BOP. The balance of Trade (BoT) or Trade Balance is a part of the Balance of Payments (BoP). BoT just includes the balance between export and import of goods.

BoP not only adds the service-trade but also many other components in the current account (Eg: Transfer payments) and capital account. Accommodating Items of BoP Accommodating items, also termed as ‘below the line items’, are those items of BoP that are not determined by considerations of profit but to restore identity of BoP i.e.

to balance the BoP. Balance of Payments Identity Current Account + Capital Account + Official Reserve = 0. Balance of payments (BoPs) is systematic statement that systematically summarizes, for a specified period of time, the monetary transactions of an economy with the rest of the world.

Put in simple words, the balance of payments of a country is a systematic record of all transactions between the ‘residents’ of a country and the rest of the world. balance of payments A record of a country's trade and financial transactions with the rest of the world over a particular period of time, usually one year.

Fig. 8 shows the UK's balance of payments account for The account is divided into two main sections, the current account and the investment and other capital transactions account. The balance of payments is the record of all international trade and financial transactions made by a country's residents.

The balance of payments has three components—the current account, the financial account, and the capital t accounts measure international trade, net income on investments, and direct payments. The Balance of Payments and the Exchange Rate In today's global economy world, the phenomenon of the "closed economy" —one that is unaffected by international trade and capital flows— is little more than an abstract textbook concept.

The notion of a closed economy is nevertheless quite. The Balance of Payments Class 12 The Balance of Payments Class 12 macroeconomics Balance of payment important terms Autonomous items in BOP Accommodating items Autonomous and accommodating items.

The balance of payments (also known as balance of international payments and abbreviated B.O.P. or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the outflow of money to the rest of the financial transactions are made by individuals, firms and government bodies.

An alternative nomenclature is that capital flows are ‘above the line’ (autonomous) or ‘below the line’ (accommodating). The terms “balance of payments deficit” and “balance of payments surplus” will then be understood to mean deficit or surplus on all autonomous transactions taken together.

The balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year. The balance of payments (BOP) is the method countries use to monitor all international monetary transactions at a specific period.

Usually, the BOP is .