Answers:
Since BoP is always constructed on the basis of
double-entry book-keeping, credit is always equal to debit. If the credit on
the current account is lower than the debit, then funds will flow into the
country and will be recorded as credit of the capital account. Thus, the excess
of debit on the current account is balanced. Hence BoP is in equilibrium when
the combined balance of current account and capital account is equal to zero
i.e. the sum of debits and credits in the current and capital account is zero
so that the official reserve account balance becomes zero.