Differentiate between capital account and current account.

Banking & FinanceManagementCompanies/Organisations

The major differences between capital account and current account are as follows −

Capital Account

  • These are accounts related to capital investments and expenditures of a country to another.

  • It measures inflow and outflow of capital in economy.

  • It evaluates country net investment position.

  • Impacts foreign assets and liabilities of a country.

  • Deals with source and utilisation of capital.

Current Account

  • These are accounts related to trade of goods and services of a country.

  • It measures inflow and outflow of goods and services in the economy.

  • Merchandise trade, services, income receipts and unilateral transfers are key components.

  • It evaluates trade surplus/trade deficit of a country.

  • Impacts on net income and output of a country.

  • Deals with receipts and disbursements in cash and non-capital items.

raja
Published on 27-Jul-2020 11:44:13
Advertisements