11 November 2010
Hi Abhishek, the entry given by u is not correct as iif u say it is exchange gain, it will be a credit item. the entries as per AS 11 are given below. Initial recording : Debtors A/c Dr. E.g 45 To Sales A/c 45 (spot rate / avg rate) if the debt is settled during the year : Bank A/c Dr. 46.5(rate on the date of receipt) To Debtors A/c 45 (original Amt.) Difference will be considered as ex. gain or loss (i.e 1.5 gain in the above case)and transferred to P/L A/c at the year end. If the debt remains unpaid till the year end, it being the monetary item will be shown at closing rate and any difference between originally recorded amt. and year end closing rate amt will be shown as ex. Gain or loss in P/l A/C for which following entry is passed (say closing rate is 47) Debtors A/c Dr. 2 (47-45) To Ex. gain 2 Now the recorded amount is 47 In the next year, if it is settled at 46 then there will be ex loss of 1 which will be recorded as under : Bank A/c Dr 46 Ex. Loss A/c Dr. 1 To Debtors A/c 47 Regards, CA Shakuntala Chhangani
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