Define current account and capital account of BOP.

Explanation

i) Current account of BOP. It records all those transactions between residents of a country and rest of the world which do not cause a change in the asset or liability status of the residents of a country or its government.
ii) Capital account of BOP. It records all those transactions between residents of a country and rest of the world which cause a change in the asset or liability status of the residents of a country or its government.