13 February 2009
Please, Help me, We are dealing with Indian Co. he give me Payment in US Dollars. He send me US$ 12000 @ 49.54 and bank give us credit US$11995 @ 48.94 and bank not show US$ 5 dollar in our statement. How should we pass this entry in our Books.
15 February 2009
First, find out the base rate i.e., the rate of foreign exchange prevailing on the date of sale if the payment is received in same year or the rate as on 31st march of previous year, if the payment is recived in later years.
Compare the rate on date of payment received with the base rate. If rate received is more, it is your gain to be credited to foreign exchange fluctuation account. (opposite entry if it is less).
for ex. as per base rate you should get Rs.20 but because of fluctuation in rate you got 21 entry will be
bank dr. 21 to debtor 20 to Foreign Exchange fluctuation 1
now if bank deducts Rs.0.50 as commission, the entry will be
bank dr. 20.50 bank commission dr 0.50 to debtor 20 to Foreign Exchange Fluctuation 1
17 February 2009
He is an Indian Party and We are also billing in Indian Rupees and he give me payment in US Dollar then what's the treatment in Account books?
CAclubindia
