Forex treatment

Respected Sir,

Following will be the Entries in the above mentioned case:-

Voucher Type : Bank Payment

Travelling Exps A/c            Dr               48000

     To Bank A/c                                                     48000

( Being $1000 purchased @ Rs. 48/$ )

Voucher Type : Journal

Cash A/c  (Foreign Currency)    Dr.       4380

(Grouped under  Current Assets) 

    To Travelling Exps                                          4380

( Being the remaing balance credited to 

travelling Exps A/c [80*43.25] )

Therefore, as on 31st March the value of Foreign Dollars in han in the Balance Sheet will be Rs. 4380.

Please correct me if I am wrong.

Regards,

Devendra K

It's better to clasify the a/c as Travel Overseas A/c to distinguish from Local Travel Expenses.

The Exchange gain/Loss/ Charges also can be booked under the above heading.

It will be useful to derive the "Expenditure in Foreign Currency" statement when it has to be declared in Notes of Account.

Agree with mr V.p. narasimhan disti between local & travelling overseas so it become easy to find out expenditure in foreign curreancy

Cash in dollar       dr                          1000$

To creditor for  A (party from Whom purchase     )                                  1000$

Director     A/c              Dr           1000$

To cash In dollar                        1000$

After Travel complete

Travelling exp Dr                                                    920$

Cash In hand $                                                         80$

To Director                                                                                 1000$

the exchange gain/loss will taken at the rate at which dollar purchased & spent during travelling  transfer to cash in dollar a/c

at 31st amrch for exmple if rate is 43.35 at purchased rate  48

then

Unrealised exchange /loss dr                                               360(48-43.5*80)T

To cash in had $                                                                 360

if you see

your account shows  80*43.5=3480 in cash in dollar a/c

Originally posted by : V P Narasimhan
	It's better to clasify the a/c as Travel Overseas A/c to distinguish from Local Travel Expenses. The Exchange gain/Loss/ Charges also can be booked under the above heading. It will be useful to derive the "Expenditure in Foreign Currency" statement when it has to be declared in Notes of Account.

AGREED.

On 7th april company deposit cash in hand dollar in bank at rate 46

bank accounts  dr                                 3680

cash in hand dollar  80*46            3680

exchange gain/loss taken rate which is on 31st march  so in this case 3680-3480

cash in hand dollar dr         200 (80*(46-43.5

To exchage gain   

Mr. valji you are correct...