Accounting Treatment of Export LC | Accounting Treatment of Sales Contract

Related Articles

LC Code & Type introduction

12/06/2022

Why Recondition Vehicle Purchase from Showroom or Import from Abroad

14/11/2021

Cost of Goods Manufacture (COGM) & Work-in-Process Calculation in Woven Garments.

11/10/2021

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

Particulars			Amount $	Amount $
a) Export LC given from Buyer-
Assets (Debtors)	H&M Buyer A/C (Export LC)	Dr.	22,500.00
Liabilities	Unearned Export R/V A/C	Cr.		22,500.00
b) Goods Export to Buyer-
Liabilities	Unearned Export R/V A/C	Dr.	15,750.00
Income	Export R/V A/C	Cr.		15,750.00
c) T.T/Bill of Exchange Received from Buyer-
Assets	Bill 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-
Assets	Bank A/C	Dr.	15,750.00
Assets	Bill Receivable A/C (T.T)	Cr.		15,750.00

Equation	Assets		Liabilities	+	Income
Si #	H&M	Bill Receivable	Bank	=	Unearned Export R/V		Export 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