Which account in the balance of payments records transactions involving the export or import of goods and services, and receipts such as dividends and remittances?

• A. Capital account
• B. Current account
• C. Financial account
• D. Balance of payments

Answer: (B)

The current account records activity from exporting and importing goods and services, and also includes income receipts like dividends and remittances. Exports boost the current account while imports subtract from it, and dividend and remittance flows are types of income transfer that also fall under this account. The capital account handles capital transfers and non-produced assets, the financial account tracks cross-border financial asset and liability flows, and the overall balance of payments sums these accounts. So, this account is the one that covers both trade in goods and services and these income receipts.