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:-
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| 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 |
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