please advise me how to account for the below transaction.(example)
1000$ @ Rs.52/$ sold to Mr.X on 05.01.2011. 1000$ remitted by Mr.X towards account on 07.02.2011.(if exchange rate is Rs.51/$ and if exchange rate is Rs.53/$).Please guide me at what amount the party account should be credited with.
07 February 2011
An exchange difference results when there is a change in the exchange rate between the transaction date and the date of settlement of anymonetary items arising from a foreign currency transaction. When the transaction is settled within the same accounting period as that in which it occurred, all the exchange difference is recognised in that period. However, when the transaction is settled in a subsequent accounting period, the exchange difference recognised in each intervening period up to the period of settlement is determined by the change in exchange rates during that period.
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