Buyers Credit Accounting
This query is : Open
09 January 2011
Can anyone tell me the accounting of Buyers Credit????
09 January 2011
Buyer Credit is a credit facility provided by an Indian Bank or Lending Institution to the overseas buyer (Importer) to purchase Goods or Machinery from Indian Exporter. Buyer Credit facility is extended for a specific period of time.
Buyer Credit facility ensures safety and security of the payment to be received by the Indian exporter and the buyer or importer can have an agreement with the Indian bank or lending institution to settle the credit within a stipulated period of time at mutually agreed rate of interest and other terms.
when money paid on our bahalf to party
Party A/c Debit xxxxxx
Buyers credit account Cr xxxxxx
When we pay back
Buyers credit Dr xxxxxxxx
Bankc Account Cr xxxxxxx
any charges taken by bank
Bank comm. Dr xxxxxx
Bank account Cr xxxxxxx
Bank interest Dr xxxxx
Bank account Cr xxxxx
when currency fluctuation
currency fuctutaion (Dr or credit)
Byers credit (debit or credit.)
Buyer Credit facility ensures safety and security of the payment to be received by the Indian exporter and the buyer or importer can have an agreement with the Indian bank or lending institution to settle the credit within a stipulated period of time at mutually agreed rate of interest and other terms.
when money paid on our bahalf to party
Party A/c Debit xxxxxx
Buyers credit account Cr xxxxxx
When we pay back
Buyers credit Dr xxxxxxxx
Bankc Account Cr xxxxxxx
any charges taken by bank
Bank comm. Dr xxxxxx
Bank account Cr xxxxxxx
Bank interest Dr xxxxx
Bank account Cr xxxxx
when currency fluctuation
currency fuctutaion (Dr or credit)
Byers credit (debit or credit.)
10 January 2011
Thanks for the guidance but Sir, my case is:
A Co. purchase(imports) machinery from China from X Co.(in china)
INDIAN BANK makes an arrangement to pay to Exporter(X Co.) on behalf of A Co. through OVERSEAS BRANCH of the same Bank.
Indian Bank act as a Guarantor for A Co. in this case.
A Co. will pay to Indian Bank at the end or will convert it into Term Loan.
How A Co. will represent the entire transactions in its books of Account???
A Co. purchase(imports) machinery from China from X Co.(in china)
INDIAN BANK makes an arrangement to pay to Exporter(X Co.) on behalf of A Co. through OVERSEAS BRANCH of the same Bank.
Indian Bank act as a Guarantor for A Co. in this case.
A Co. will pay to Indian Bank at the end or will convert it into Term Loan.
How A Co. will represent the entire transactions in its books of Account???
10 January 2011
Term loan account will take place of buyers credit. nothing new.
10 January 2011
THANKS SIR, BUT MY POINT IS HOW TO ACCOUNT FOR MACHINERY & BANK?????
IS IT LIKE THIS-
MACHINERY ACCOUNT DR...
TO BUYERS CREDIT ACCOUNT
AND ON PAYMENT-
BUYERS CREDIT ACCOUNT DR...
TO BANK ACCOUNT(INDIAN BRANCH)
UNTIL THEN BUYERS CREDIT ACCOUNT WILL BE SHOWN UNDER "SECURED LOANS HEAD" OF LIABILITY SIDE OF B/S.
PLEASE GUIDE...
IS IT LIKE THIS-
MACHINERY ACCOUNT DR...
TO BUYERS CREDIT ACCOUNT
AND ON PAYMENT-
BUYERS CREDIT ACCOUNT DR...
TO BANK ACCOUNT(INDIAN BRANCH)
UNTIL THEN BUYERS CREDIT ACCOUNT WILL BE SHOWN UNDER "SECURED LOANS HEAD" OF LIABILITY SIDE OF B/S.
PLEASE GUIDE...
11 January 2011
hello sir, pls reply
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