balance of payments

Examples of balance of payments in the following topics:

• Balance of Payments

  • Balance of payments (BOP) accounts are an accounting record of all monetary transactions between a country and the rest of the world.
  • Balance of payments (BOP) accounts are an accounting record of all monetary transactions between a country and the rest of the world.
  • The term balance of payments often refers to this example: a country's balance of payments is said to be in surplus (balance of payments is positive) by a certain amount if sources of funds (such as export goods sold and bonds sold) exceed uses of funds (such as paying for imported goods and paying for foreign bonds purchased) by that amount.
  • There is said to be a balance of payments deficit (the balance of payments is said to be negative) if the former are less than the latter.
  • Then the net change per year in the central bank's foreign exchange reserves is sometimes called the balance of payments surplus or deficit.

• The International Monetary Fund (IMF)

  • The IMF's stated goal was to stabilize exchange rates and assist the reconstruction of the world's international payment system post-World War II.
  • The organization's stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.
  • Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members' economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment.
  • Such market imperfections, together with balance of payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse effects on both national and international economic prosperity.
  • These loan conditions ensure that the borrowing country will be able to repay the fund and that the country won't attempt to solve their balance of payment problems in a way that would negatively impact the international economy.

• Day-to-Day Needs

  • Cash inflows come from cash sales of inventory, collection of credit sales, sales of other assets, and funds obtained through credit financing.
  • Cash outflows occur due to cash payment of business expenses, purchase of assets, and payment on debt .
  • "Cash and cash equivalents" on the balance sheet are the most liquid assets found on this statement.
  • Cash and cash equivalents are also used in the contexts of payments and payment transactions and refer to currency, money orders, paper checks, and stored value products, such as gift certificates and gift cards.
  • Cash flow forecasting or cash flow management is a key aspect of the financial management of a business, because planning for future cash requirements can help to avoid a liquidity crisis in the business.

• Electronic Banking

  • The emergence of new technologies has turned banking into a round-the-clock business.
  • You can use them to make a withdrawal, make a deposit, make a loan payment, transfer money from one account to another, or check your account balance.
  • The emergence of online banking has ushered in a new era of convenience and security in managing money.
  • Online banking allows you to check your balance, pay your bills, view statements, transfer funds, view transaction history, and much more.
  • You can use them to make a withdrawal, make a deposit, make a loan payment, transfer money from one account to another, or check your account balance.

• Long-Term Loans

  • Mortgage loans are generally structured as long term loans, the periodic payments for which are similar to an annuity and calculated according to the time value of money formulae.
  • The most basic arrangement requires a fixed monthly payment over a period of ten to thirty years, depending on local conditions.
  • Some mortgage loans may have no amortization or require full repayment of any remaining balance at a certain date; others may have negative amortization.
  • Payment amount and frequency: The amount paid per period and the frequency of payments may change, or the borrower may have the option to increase or decrease the amount paid.
  • Prepayment: Some types of mortgages may limit or restrict prepayment of all or a portion of the loan, or they may require payment of a penalty to the lender for prepayment.

• Credit Cards

  • If, however, even $1 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received.
  • A credit card is a payment card issued to users as a system of payment.
  • Credit cards allow the consumers a continuing balance of debt, subject to interest being charged.
  • Some credit cards often levy a rate of 20 to 30 percent after a payment is missed.
  • A credit card is a payment card issued to users as a system of payment.

• The Accounting Equation

  • The fundamental accounting equation, which is also known as the balance sheet equation, looks like this: $\text{assets} = \text{liabilities} + \text{owner's equity}$.
  • Or more correctly, the term "assets" represents the value of the resources of the business.
  • On the right side of the equation are claims of ownership on those assets: liabilities are the claims of creditors (those "outside" the business); and equity, or owners' equity, is the claim of the owners of the business (those "inside" the business).
  • Looking at the fundamental accounting equation, one can see how the equation stays is balance.
  • Likewise, as the company receives payment from its customers, accounts receivable is credited and cash is debited.

• Commercial Banks

  • Commercial banks engage in the following activities: the processing of payments; accepting money on term deposit; lending money by overdraft, installment loan, or other means; providing documentary and standby letters of credit guarantees, performance bonds, securities underwriting commitments and other forms of off- balance sheet exposures; and the safekeeping of documents and other items in safe deposit boxes.
  • Commercial banks provide a number of loans.
  • An overdraft is an example of an unsecured loan.
  • An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.
  • If the positive balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.

• Factoring Accounts Receivable

  • The use of factoring to obtain the cash needed to accommodate a firm's immediate cash needs will allow the firm to maintain a smaller ongoing cash balance.
  • By reducing the size of its cash balances, more money is made available for investment in the firm's growth.
  • In "advance" factoring, the factor provides financing to the seller of the accounts in the form of a cash "advance," often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor's discount fee (commission) and other charges, upon collection.
  • The reserve, the remainder of the purchase price held until the payment by the account debtor is made.
  • External fraud by clients: fake invoicing, mis-directed payments, pre-invoicing, unassigned credit notes, etc.

• Defining the Balance Sheet

  • The balance sheet is a summary of the financial balances of a company.
  • In financial accounting, a balance sheet is a snapshot of a company's (sole proprietorship, a business partnership, a corporation, or other business organization, such as an LLC or an LLP) financial situation.
  • Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.
  • Balance sheets are usually presented with assets in one section and liabilities and net worth in the other section with the two sections "balancing. "
  • A business operating entirely in cash can measure its profits by withdrawing the entire bank balance at the end of the period, plus any cash in hand.