Capital account


This economic terminology is commonly applied in those individuals who manage a high monetary level, the capital account is a main component in the balance of payments that each nation manages, it shows the assets that are manipulated both inside and outside each country and do not keep relation to the assets of the national official reserve. The capital account includes the investments of sale or purchase of foreign or national bank accounts, by the owner nation during the school period of one year, in short, all payments that have been made outside the country represent the capital account because they are in foreign currency.

According to how the capital account is invested, it can be classified as:

  • Capital goods: are those goods or companies that are in operation for the production of consumer items.
  • Working capital: is that amount of money that was invested to generate production of goods, which must be constantly replaced.
  • Variable capital: it is the capital used to pay the salaries of workers with public office.
  • Fixed capital: it is the one that is maintained over time since it is not exhausted with the investment in goods or services.
  • Continuous capital: it is the money implemented for the purchase of machinery and raw material used to make a product that is going to be sold.
  • Public Capital: they are all the institutions, companies and resources that are of the state.
  • Intangible capital: is that investment that is not tangible like human resources that increases with the education of the population.