What is Balance of Payment?

The Balance of payments of a country is a systematic account, in the form of summarized
record, of all economic transactions between residents of a country and non-residents over
a given period. (normally the BOP covers a period of one year). The account is prepared
using the double entry accounting system with both the debit and credit aspects of each
transaction being recorded under different heads within the account which implies that the
BOP account always balances. (i.e. Debit and Credit summations are equal).