Respected Sir/Ma'am! Would you pls explain the third entry, i.e. MAX LTD USA Dr. 2000 TO FOREIGN EXCH. FLUCTUATION 2000 I want to know if the company made purchase suffered any loss due to exch.

This question was asked in First Payment Then Goods Imported

Respected Sir/Ma'am! Would you pls explain the third entry, i.e.

MAX LTD USA Dr. 2000

TO FOREIGN EXCH. FLUCTUATION 2000

I want to know if the company made purchase suffered any loss due to exch. rate diff and why Max ltd has been debited and foreign exch has been credited.

Thanks,

Hemant

hem1717

Nov. 20, 2016, 5:38 p.m.

Answers!

Davneet Singh

Nov. 20, 2016, 9:25 p.m.

Hi Hemant

Actually We have earned foriegn exchange fluctuation income

and not loss

as we have made payment in advance at 60000 but purchased goods for 62000

Thats why foriegn exchange fluctuation has been credited as it is an income

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