The Balance of Payments (BOP) is a financial statement that summarizes all economic transactions between residents of a country and the rest of the world over a specific period. It includes trade in goods and services, investment income, and financial transfers. The BOP is divided into two main accounts: the current account and the capital account. The current account records the trade balance, which is the difference between exports and imports, while the capital account tracks financial transactions, such as investments and loans. A positive BOP indicates that a country is earning more from its international transactions than it is spending, while a negative BOP suggests the opposite.