CA Abhishek Singh (practice) (2106 Points)
18 January 2013one of my client has purchased certain item from US for which he was billed $2500 on 06/12/2012
He made the payment of $2500/- through HDFC bank ltd on 15/12/2012 @ 55.83.
My question :
Entry for purchase should be passed by applying which rate and from where we will ge t the rate and whether payment entry should be passed @ 55.83 ?
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 18 January 2013
Practically, companies take monthly average rates to account foreign transactions, But in case, you are using spot rate(i.e. date of transaction), then you may refer RBI rates at the following link:
https://www.rbi.org.in/scriptts/ReferenceRateArchive.aspx
Accounting entry will be as follows:
1) Purchase A/c Dr. 2500 X 54.47
To Vendor A/c 2500 X 54.47
2) Vendor A/c Dr. 2500 X 55.83
To Bank A/c 2500 X 55.83
3) Exchange Fluctuation A/c Dr. 2500 X(55.83-54.47)
To Vendor A/c 2500 X(55.83-54.47)
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 18 January 2013
Alternatively Bank TT rates(both-buying & selling rates) can also be considered
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