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Which of the following statements is correct regarding the Balance of Payments (BOP)?
Correct Answer: C — BOP must always balance when all accounts are accurately recorded.
Explanation:
The correct answer is C: BOP must always balance when all accounts are accurately recorded.
The BOP is a double-entry accounting system. Every transaction appears as both a credit and a debit. While individual accounts (current, capital, financial) may show surpluses or deficits, the overall BOP balances when all components are correctly accounted for.