Accounting

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.

                                       *********************************************

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