Accounting entry for the Customer Account
Thursday, March 19, 2009
We are an export base firm. One of our customer declared himsel bankrupt and State Bank had asked us to route foreign currency through SBP from our own resources. We'll have to transact the said amount through our own foreign currency account. What would be the accounting entry for the Customer Account ?
Accounting Treatment:
There is no relation of routing foreign currency from your own source with the receivable balance of the party. Both are separte matters. In first transaction your own money would come back to your own account. SBP just wants you to show a foreign proceed whether through outside or local in it allows.
As for as party balance is concerned, if management is of the view that export proceed will not come then you have to write off the balance and charge it to profit and loss account.
Labels: accounting, Write off
posted @ 11:37 AM,
1 Comments:
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At March 22, 2009 at 9:03 AM,
said...
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Please clarify the meaning as i cant get tht wht do u mean by routing through SBP / own resources and why it should be? Please in detail.
Regards
Zshan
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