21 April 2010
pls tell anyone expert how are entry made in accounting of lc, we are importer and exporter and we have taken a lc for 90 days agst our import and gave 100 % margin as FDR. one more thing their exp like bank charges should be birurcate as financial year
21 April 2010
LC is an obligation to make or release payment to suppliers in case of Imprort and vice versa in case of Export. Accounting entry will be happened in books of accounts only when payment is made or received, however bank charges while opening LC is just like an expenditure to be debited to PNL. In case of FDR which is 100% margin to bank, it is just like a short term of Fixed Deposit and to be accounted for and when bank debit your account.
21 April 2010
No need to bifurcated such exps becasue these are like normal bank charges. If you have your own LC & its related Business policy, than you can.
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