kumar mayank (Professional) (35 Points)
06 September 2010if 100$ paid as advance to emplooye by purchasing at the rate of 45 but expense made is $100 on the day on which exchange rate is 47 whether exchange loss arises in such case? since advance is made in $ currency and expense also made in $ currency.
Please quote basis of ur opinion.since my client booked exchange loss
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 September 2010
YES BOOK FORIEGN EXCHANGE LOSS
Rahul Agarwal
(Future CA)
(217 Points)
Replied 06 September 2010
Mr Navin
I dont think that there is any exchange Loss.
Only expense will be booked @ 45*100.
Could you explain me why this loss should be recognized
Ashish Sharma
(Service)
(1028 Points)
Replied 06 September 2010
Yes Rahul Agree with You no loss exist.
Pradeep Kamath
(Chartered Accountant)
(134 Points)
Replied 23 December 2010
Mayank,
1. JE on making the advance:
Advance A/c............Dr 4,500
To Cash A/c 4,500
2. On incurring the expense
Expense A/c............Dr 4,700
To Advance A/c 4,500
To Exchange gain A/c 200
So the net expense in the income statement is Rs.4500.
CAclubindia
