Capital Account – What is a Capital Account?

What is a Capital Account?

Definition of Capital Account: this is one among the three main components of the balance of payments of a country. The rest of them are known as financial account and current account. These three accounts are divided into sub categories, in which each of them asks for a different kind of monetary transaction. All the capital transfers are recorded by the current account. These transmits may be defined as the achievement or disposal of the non financial assets which are used for production but are not produced like for extracting diamonds mines are used. A capital account is again divided into financial flows caused due to transfer of items, financial assets and debt forgiveness by the migrants who leave or enter a country. Extra transfers may include transferring of the ownership on fixed items, transferring of the funds attained from the sale or attainment of fixed advantages.