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+--- Thread: Accounting Standard 11 (Revised) (/showthread.php?tid=1260)
Accounting Standard 11 (Revised) - josephrf - 11-07-2004
Hi, I'm a tybcom student and have the following difficulty
suppose the transactions are as follows
a) 1-1-04 Purchased Machinery from Kemco of US for USD 1000. Exchange rate on 1-1-04 = Rs.50.
So I will pass the following journal entry
Machinery A/c Dr. Rs.50,000
To Kemco of US A/c Rs.50,000
b) 10-1-04 Full Payment made to Kemco. Exchange rate on 10-1-04 = Rs.51 per USD.
According to AS11 Revised which entry would I pass?
Would I pass this entry
Kemco of US A/c Dr. Rs.50,000
Machinery A/c Dr. Rs. 1,000
To Bank A/c Rs. 51,000
Or Would I pass this entry
Kemco of US A/c Dr. Rs.50,000
Foreign Exchange Fluctuation A/c Dr. Rs. 1,000
To Bank A/c Rs.51,000
Please can someone tell me which entry is correct according to the Revised Accounting Standard 11.
Thanks Joe.
- mhmirza - 11-08-2004
AS 11 (Revised) is an indian standard not applicable in Pakistan. Thus we can not help you. However I think your first entry might be correct.