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Foreign Exchange Transactions Issue

This query is : Resolved 
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(Querist)
30 September 2021 Dear Experts,
I have a query regarding the foreign exchange transaction booking.

We pay a vendor in the US in US dollars as an advance payment (Advance for 3 months work) for the services they will provide us in the coming months.
They send us the invoice monthly and the exchange rate is different so advance cannot be fully settled with the invoice they send us.

My question is how can we settle the advance payment with the invoices they send us as they send us a monthly invoice and the advance payment is done 3 months advance.
Should we settle it at the end of the year or every month or every 3 months using foreign exchange gain/loss account?

Many thanks in advance.

Regards,
Santosh
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Aashok Kumar Sharma online

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Aashok Kumar Sharma online (Expert)
04 December 2021 Just create a Foreign Exchange Gain/Loss Account and Debit or Credit the same based on situations to make the vendor account NIL.

It will sppear in PL as debit/credit accordingly
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