Unadjusted forex gain or loss

can someone give me understanding regarding automatic entries passed in tally at the end of each month named "unadjusted forex gain or loss"?
Replies (2)
Quick Summary
This discussion explains the automatic 'unadjusted forex gain or loss' entries generated in Tally at the end of each month. It uses an example of an export transaction to illustrate how differences in exchange rates between booking and payment are accounted for. The entries show how foreign exchange gains are calculated, adjusted, and then transferred to the Profit & Loss account.

 Export  of   5000  Qnt  

   Entries  will be  for Export 

 1) Export  Sales    A/c    Dr                       350000/- 

   To Trade  Debtors    A/c   Cr                                    350000/-                

(  Boking entry  rate of  Dollar @ 70=1 rupee  , 50000  70 =  350000/-   date  1/4/2021     ) 

 

2) When you received payment form  foreign   party 

    Bank                      A/c   Dr                 370000/- 

    To  Trade  Debtors     A/c    Cr                                   370000/- 

(  Receipt  of Payment entry  Dollar @ 74=1 rupee , 5000   74 = 370000/-  date 15/4/2021 ) 

 

3)  So we have foreign  exchane gain , entry will be 

     Trade  Debtors         A/c      Dr               20000/- 

     To Exchange Gain     A/c    Cr                                 20000/- 

(  Being exchage gain adjusted  on 30/4/2021  )  

 

4)   Exchange  gain  transfer  to profit & Loss 

      Exchange  Gain      A/c     Dr                20000/- 

      To Profit  & Loss     A/c     Cr                                 20000/-                                    

(  Transfer of Gain  ) 

    So in  Tally  Exchange gain will be   calculated  and  adjusted  at  same time will be transfer  to P&L  

    Exchange Gain  A/c  will  be under  Indirect  Income   P&L Account  , if  loss then will be under  indriect  Expense 

Thank you

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