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Foreign exchange loss or gain entry

26 September 2018

Hi All,

Please note I received the money in my current bank account after converting USD 355.36 in Indian Rupees 25,724.51 and bank charges of Rs .46.30 deducted from the same.

I received the amount on 25/09/18 currency rate was 1 USD = Rs. 72.5488.

Please let me know the entry and as well how to open the foreign exchange loss or gain account in tally and under which head.3

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3 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 26 September 2018

Entry will be

Bank account debit 25742.51

Bank charges account debit 46.30

To (Partys name from whom you got payment) account credit 25788.81

Bank charges here is Foreign exchange loss.

Foreign exchange gain or loss account is opened under Indirect expense head in PNL

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satish (teaching) (2046 Points)
Replied 15 October 2018

suppose a seller raised an invoice in dollars($10), receipt to be consider in dollars($10). but exchange rate on the date of invoice is RS. 60 per $. and as on the date of receipt is RS. 58 per $. no loss in dollars.
but loss was raised on conversation.
amount receivable as on sale is RS. 600.
but actually received only RS. 580.
diff is foreign exchange loss.

but in your case no foreign exchange loss. but bank charges can be considered as indirect exp.