Accounting of lc

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Smrity (Querist)
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24 November 2014 Can anyone tell me, when we receive LC amount from a cutomer, should we credit the customer account or keep under LC account and transfer to the customer account when the LC is due.

if it is to be credit to the LC ledger and transferred only when due, what is the reason for the same.

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2014 LC is the assurance. The amount as such is NOT received, what is received is the letter. So, no entry to be passed to customer's account.
A separate LC register be kept.

Rupesh Jain

Rupesh Jain (Expert)
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25 November 2014 if you are take discounting the LC then you have to maintain the ledger . in LC receivable discounting a/c

when the amount due then you can tfr the amount in customer ledger.

due to may possible amount not received on due date.

Smrity

Smrity (Querist)
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27 November 2014 Thank you very much for the answer

Amol S Joglekar

Amol S Joglekar (Expert)
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27 November 2014 You are most welcome.
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