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Difference Between Current Account And Capital Account

>> November 24, 2009

  1. Current account shows current year current year transactions and capital account shows both current transactions relating to businessman and initial capital of businessman.
  2. According to FEMA Act 2000 , " There is no restrictions on holding or exchanging of foreign currency under Current Account . But Any foreign currency is under capital account , then it must be controlled under the regulations of RBI ."
  3. In partnership , partners can make current account separately from capital account in which they can show only their salary , interest on capital and interest on drawing etc. and in capital account , they can show only their capital invested in the business of partnership.
  4. USA has divided export and import transactions into 2 accounts: One is the current account and other is the capital account. The current account includes in international trade in goods and services and with earnings on investments. The capital account includes of capital transfers and the acquisition and disposal of non-produced, non-financial assets.
  5. In general Current account is used for receipt and payment cash and non capital items and capital account is used for sources and utilization of capital .

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