Can we net-off foreign transaction by Journal entry ?

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Amit Bhatkar (Querist)
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15 March 2009 Hi All

Can we net-off the foreign transaction ?

For example : Suppose we are liable to pay dividend to one of our group company X in Europe , and at the same time X compnay is liable to pay professional fees to our company in India

If the outcome of both the transaction is same say Euro 10,000. Could we pass the journal entry by debiting divend payable and crediting professional fees receivable a/c ?

Please help me.
Amit

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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15 March 2009 no

Amit Bhatkar

Amit Bhatkar (Querist)
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15 March 2009 Hi,
Thanks afor the reply.
But does this bcos of group party transaction or nettig-off is not at all allowable with other companies also?

What is the situation for domestic party transaction ?

Thanks

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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15 March 2009 according to companies act dividend should be paid in cash or by a warrant or cheque.

so u need to show the journal entry for payment of dividend.