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Sagot :
Answer:
The Transaction that to be entered in the Account would be:
Account payable A/c Dr. 130$
To Bank A/c 130$
Also,
Profit and Loss A/c Dr. 10$
To Foreign Exchange Fluctuation loss A/c 10$
Step-by-step explanation:
client received a bill as per question mentioned of 100 Euros on March 1 when the exchange rate is 1 Euro = 1.20 $,
Accordingly the price liable to be paid as on date 1 March is
100 Euro × 1.20= 120 $ .
Further, the client is agreed to pay the amount on the April 1 when the exchange rate stands out at 1.30 $, that specifies that the client now has to pay the extra price due to the exchange rate fluctuation i.e.
(1.30 - 1.20)$ = 0.10$ to the French vendor.
Therefore , the Transaction that to be entered in the Account would be:
Account payable A/c Dr. 130$
To Bank A/c 130$
Also,
Profit and Loss A/c Dr. 10$
To Foreign Exchange Fluctuation loss A/c 10$
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