foreign Currency A/c treatment

FC in Hand A/c Dr             50,000

            To Cash / Bank                           50,000

(Being FC purchased - $1000 at Rs.50/$)

B) X's Advance A/c Dr         50,000

           To FC on Hand                             50,000

(Being Tour advance given to Mr.Xand to kept in debtors list )

C) Tour Expenses A/c         Dr                  45,000(900$* exchange rate at date of transaction or monthly average rate )

FC on Hand A/c                Dr                   5,000

      To Tour Advance                                                50,0000

D) Exchage of FC

Cash / Bank A/c Dr (100$ X 48)          4,800

Forex Loss                                                 200( Drebited in P/l a/c )

       To FC on Hand                                                     5,000

At account closure balancxe in FC a/c should be reinstated at rate existing on balance sheet .

And profit and loss on it is accounted for in P/l a/c

Anshika has very rightly noted down the entires..

I would just like to add that In case the accounts are closed before settlement of advance (ie. there is balance in travel advance account and not FC a/c) then the balance in advance account will have to be re-stated at the rate as of balance sheet date.