Tuesday , May 21 2024

Accounting Treatment of Export LC | Accounting Treatment of Sales Contract

Accounting Treatment of Export LC is given form Buyers. Its very important to how will you enter the entry in our software/general ledger/manually. If you are responsible to maintain the RMG accounts. So obviously have to maintain to proper Accounting treatment the Export LC is given form buyer. 
Example: Date- 01/01/2016 H&M Submit the order to BCL 5000Pcs @ $4.50 & also confirm the Export LC by bank $22,500.00. after given the order BCL Export the order 3500Pcs date-05/05/2016 after receiving the goods H&M send the T.T/Bill of Exchange by the bank date- 15/05/2016, $15,750.00 and the T.T/Bill of Exchange amount has realized end of the month. The accounting treatment as below:-

Video Link>>>>>https://youtu.be/fQGPPWBf3I4

ParticularsAmount $Amount $
a) Export LC given from Buyer-
Assets (Debtors)H&M Buyer A/C (Export LC)Dr.       22,500.00
LiabilitiesUnearned Export R/V A/C Cr.       22,500.00
b) Goods Export to Buyer-
LiabilitiesUnearned Export R/V A/CDr.       15,750.00
IncomeExport R/V A/CCr.       15,750.00
c) T.T/Bill of Exchange Received from Buyer-
AssetsBill Receivable A/C (T.T)Dr.        15,750.00
Assets (Debtors)H&M Buyer A/C (Export LC)Cr.       15,750.00
d) Realized the amount by the bank-
AssetsBank A/CDr.        15,750.00
AssetsBill Receivable A/C (T.T)Cr.        15,750.00
Equation AssetsLiabilities+Income
Si #H&MBill ReceivableBank=Unearned Export R/VExport R/V
a)    22,500.00     22,500.00
b)   (15,750.00)   15,750.00
c)  (15,750.00)    15,750.00
d)  (15,750.00)   15,750.00
Total       6,750.00                    –     15,750.00        6,750.00   15,750.00
Accounting Equation

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