The balance of payments records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period. Identify the main accounts in the balance of payments.

Option 1 -> Fixed account is not a recognized component of the balance of payments.

Option 2 -> Fixed account is not a recognized component of the balance of payments.

Option 3 -> Budget account and Flexible account are not components of the balance of payments; these relate to fiscal policy and exchange rate systems.

Option 4 -> Current account and capital account are the two main accounts in the balance of payments system.

Hence, Option 4: Current account and capital account -> The balance of payments consists of two main accounts: (1) The Current Account records transactions in goods, services, income, and current transfers; (2) The Capital Account (along with the Financial Account in modern BOP framework) records capital transfers and transactions in financial assets and liabilities. Together, these accounts provide a comprehensive record of a country's economic transactions with the rest of the world. -> correct