When Credit Sales
28-01-2021 Sruthi A/C Dr (Under head - Sundry Debtors )
To Sales A/C (Under head - Direct Income)
(Being Goods sold to Sruthi Invoice. No.......... Dated.....)
When receive payment
01-02-2021 Cash/Bank A/C Dr
To Sruthi A/C
(Being Cash Received against Invoice. No......... Dated........)
When Cash Sales
01-02-2021 Cash A/C Dr
To Sales A/C
(Being Cash Received against Invoice. No......... Dated........)
Accrual Basis Concept :-
Revenues are recorded when earned.
Expenses are recorded when incurred.
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Foreign Exchange gain & loss :-
Foreign Exchange gain & loss occur when purchase/sales of goods in foreign currency due to currency difference (Fluctuating) .
Purchasing Equipment from GBP 7000/- worth.
Rate - GBP to USD 1.30
USD 1.30 (7000 x 1.30 = 9100/-)
Purchase of Equipment
Equipment A/C Dr 9100/-
To Supplier A/C 9100/-
When payment
Rate GBP to USD 1.25
USD 1.25 (7000 X 1.25 = 8750/-)
Currency Difference 9000 minus 8750 = 350/-
Supplier A/C Dr 9100
To Foreign Exchange Gain A/C 350
To Bank A/C 8750
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