journal entry for Export Sales

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R SRIDHAR (Querist)

07 February 2011 Dear sir,

please advise me how to account for the below transaction.(example)

1000$ @ Rs.52/$ sold to Mr.X on 05.01.2011. 1000$ remitted by Mr.X towards account on 07.02.2011.(if exchange rate is Rs.51/$ and if exchange rate is Rs.53/$).Please guide me at what amount the party account should be credited with.

Thank You

Regards
sreedhar

Kumar Babu.G

Kumar Babu.G (Expert)

07 February 2011 An exchange difference results when there is a change in the exchange
rate between the transaction date and the date of settlement of anymonetary
items arising from a foreign currency transaction. When the transaction is
settled within the same accounting period as that in which it occurred, all
the exchange difference is recognised in that period. However, when the
transaction is settled in a subsequent accounting period, the exchange
difference recognised in each intervening period up to the period of settlement
is determined by the change in exchange rates during that period.

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