Reconciliation on Foreign Travel Advance accounting entries

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Nirmal (Querist)
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10 November 2008 Hi all,

Correct accounting treatment on foreign travel advance accounting entries and the reason behind it?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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11 November 2008 Travel advance
To bank/cash

(Accounted in INR, for we would have purchased the currency)
The travel is accounted as soon as the travelling person submits accounts which has to be within a reasonable time.

If any currency is returned(!)

Bank Dr.
To Travel advance (INR)

the entry on the reverse is passed to the extent of return.

Accounting for loss or gain also takes place to the extent of return being the exchange difference with reference to the date at the time of advance.

Nirmal

Nirmal (Querist)
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13 November 2008 Hi Sir,

Thank you for your reply but still I have a query regarding further on this. How do you analyze fully as a Schedule VI Reconciliation item as Foreign travel advance + Expenses + Forex Difference.

Nirmal

Nirmal (Querist)
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14 November 2008 Hi Experts,
How do you analyze fully as a Schedule VI Reconciliation item for Foreign travel advance + Expenses + Forex Difference.

Deepak Agrawal

Deepak Agrawal (Expert)
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15 November 2008 Adv to employee ($100*Rs.50) (Advance take * Exchage rate as on that date)
To Bank

Expense A/c ($75*Rs.50) (Assuming $75 used)
To Adv to employee

Bank A/c ($25*51) (Assume Rs.51 as exchange rate while surrendering unused advance to forex dealer)

To Adv to employee ($25*Rs.50)
To FOrex gain ($25*Rs.1) [Rs.1 is 51-50 ie exchage difference]

Hope u understood

Nirmal

Nirmal (Querist)
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16 November 2008 Hi Deepak,

I have understood the analysis behind this explanation. Thanks a lot, your inputs are really encouraging to know in a better way and facilitates to understand to learn in a more clearer manner.

Sincere thanks to you and CA CLUB experts, members and all of those who contribute to this site regularly.

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