The BOP Must Be in Balance, but the Current Account

question 21

True/False

The BOP must be in balance, but the current account need not be.

---

Definitions:

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset over its useful life to reflect its loss of value.

Liabilities

Financial obligations or debts that a company owes to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Payable

An accounting term for the amount of money a company owes to its creditors or suppliers for goods and services purchased on credit.

Debit Side

Refers to the left side of a general ledger account which is used to record increases in asset and expense accounts and decreases in liability, equity, and revenue accounts.