Double entry accounting, with respect to calculation of balance of payments calculation, means:
A) the balance of payments statement must always balance.
B) the balance of payments statement will always favor the larger nation.
C) the balance of payments statement will always favor the smaller nation.
D) the balance of payments statement will never be in complete balance.
E) the balance of payments statement will rarely be accurate.

Question

Quizplus · Accepted Answer

Double entry accounting requires that every transaction has equal debits and credits, which ensures that the balance sheet always balances. The same principle applies to the balance of payments statement, which must also always balance to ensure accuracy and completeness of the data. Therefore, option A is the best choice. Options B, C, D, and E are incorrect as they do not relate to the concept of double entry accounting or balance of payments calculation.

Double Entry Accounting, with Respect to Calculation of Balance of Payments