Dear sir,
A company has purchased $500 for Rs25000 (rate is Rs 50 per dollar) gave to the employee as foreign travel advance, after completion of his travel he returned $100 dollar to the company (rate as on that date is Rs45) could you clarify me which entry is true??????? give reasons and on which basis???????
(a) Foreign travel expences a/c Dr 20,000 ($400*Rs50=Rs20,000)
Bank a/c Dr Dr 4500 (assuming $ has converted into rupees
100*45=4500)
Foreign exchange loss Dr 500 (100*5=500)
Foreign travel advance Cr 25,000
(b) Foreign travel expences a/c Dr 18,000 ($400*Rs45=Rs18,000)
Bank a/c Dr Dr 4500 (assuming $ has converted into rupees
100*45=4500)
Foreign exchange loss Dr 2500 (500*5=2500)
Foreign travel advance Cr 25,000
CAclubindia
