FOREIGN CURRENCIES A/C IN BANK BOOK - REG

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Mahenthiran (Querist)
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05 August 2022 HAI SIR,
I AM WORKING SEZ UNIT, WE ARE 100% EXPORT BUSINESS.
I NEED SOME CLARIFICATION FOR BOOKING FOR SALES, RECEIPT & CONVERSION ENTRY.
1. SALES ENTRY :
CUSTOMER A/C CR $ 1,000/- @ 69/- = RS. 69,000/-
TO SALES A/C DR $ 1,000/- @ 69/- = 69,000/-

2. WHEN THE MONEY RECEIVED : CUSTOMER A/C DR $ 1,000/- @ 70/- = RS.70,000/-
EEFC BANK A/C CR $ 1,000/- @ 70/- = RS.70,000/-
DIFFRENCE AMOUNT RS.1,000/- FOREX GAIN ( THIS AMOUNT ACCOUNT GOES TO CUSTOMER A/C )

3.BANK ENTRY RELATED :
WE RECEIVED PAYMENT FROM CUSTOMER ON 01.07.2022 $ 1,000/- @ 70/-

WE ACCOUNT IN TALLY FOR BANK ENTRY :
CUSTOMER A/C DR $ 1,000/- @ 70/- = 70,000/-
EEFC BANK A/C CR $ 1,000/- @ 70/- = 70,000/-

EEFC TO LOCAL BANK TRANFER A/C.
EEFC AMOUNT CONVERT INTO LOCAL CURRENCIES.

EEFC BANK A/C DR $ 1,000/- @ 72/- = RS.72,000/-
TO LOCAL BANK A/C CR $ 1,000/- @ 72/- = RS.72,000/-

BALANCE RS. 2, 000/- EXCESS IN BANK BOOK .

HOW TO ADJUST IN BANK BOOK. WHICH LEDGER PASS THIS DIFFRENCE.
KINDLY GUIDE ME .

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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07 July 2024 Based on your queries regarding the accounting entries for sales, receipts, and conversion of foreign currency in an SEZ unit engaged in 100% export business, here’s a breakdown and guidance on how to handle the transactions in Tally or any accounting software:

### 1. Sales Entry:
For booking a sales entry in Indian Rupees (INR) when invoicing in US Dollars (USD):

- **Sales Entry in INR**:
- Customer A/C (Accounts Receivable) CR: Rs. 69,000 (1,000 USD * 69)
- Sales A/C (Revenue) DR: Rs. 69,000

### 2. Receipt Entry:
When receiving payment from the customer in USD and accounting for foreign exchange gain:

- **Receipt Entry in INR**:
- Customer A/C DR: Rs. 70,000 (1,000 USD * 70)
- EEFC Bank A/C CR: Rs. 70,000

- **Foreign Exchange Gain**:
- Typically, any difference in exchange rate (Forex gain in this case) would be credited to a separate account, such as "Foreign Exchange Gain" account. Adjust this amount against the Customer A/C where necessary.

### 3. Bank Entry for Conversion from EEFC to Local Bank:
When converting USD from EEFC Bank A/C to Local Bank A/C:

- **EEFC to Local Bank Transfer Entry**:
- EEFC Bank A/C DR: Rs. 72,000 (1,000 USD * 72)
- Local Bank A/C CR: Rs. 72,000

### Adjusting Excess Amount in Bank Book:
If there’s an excess amount of Rs. 2,000 in your bank book after the conversion:

- **Adjustment Entry**:
- Create a ledger account for "Bank Reconciliation" or "Unrealized Forex Gain/Loss" depending on whether the Rs. 2,000 is a gain or loss.
- Example:
- Unrealized Forex Gain A/C DR: Rs. 2,000
- To Bank A/C CR: Rs. 2,000

### Important Notes:
- Ensure that you reconcile your bank books regularly to account for any differences due to exchange rate fluctuations or other reasons.
- Document all transactions accurately with supporting documents for audit and compliance purposes.
- Consider consulting with an accountant or financial advisor familiar with SEZ regulations and export business accounting to ensure compliance and accuracy in your financial reporting.

By following these steps and accurately recording your transactions in Tally or your chosen accounting software, you can maintain proper financial records for your SEZ unit’s export operations.

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