Advance and expense in foreign currency

YES BOOK FORIEGN EXCHANGE LOSS

Mr Navin

I dont think that there is any exchange Loss.

Only expense will be booked  @ 45*100.

Could you explain me why this loss should be recognized

Yes Rahul Agree with You no loss exist.

exchange loss 

Mayank,

1. JE on making the advance:

Advance A/c............Dr         4,500

  To Cash A/c                                     4,500

2. On incurring the expense

Expense A/c............Dr        4,700

  To Advance A/c                                4,500

  To Exchange gain A/c                        200

So the net expense in the income statement is Rs.4500.