Payment in foreign currency

This query is : Resolved

naresh (Querist)
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28 October 2013 dear sirs,
Our business is hotel booking out side india. When our foreign customer raised bill to us in foreign currency we make entry in tally with prevailing rate on invoice date. We will making payment to them in foreign currency but there is diff in rate. The rate on invoice & payment is different. What shall treat the diff. in customer account ? What we doing account entries are correct or not please guide us.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 October 2013 you credit the customer account with the initial amount booked in the Indian currency. The difference is Foreign exchange loss.

Creditor A/c Dr
foreign Exchange Loss A/ Dr
To bank A/c

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