Booking foreign currency transactions
You will recall that during the lag between invoicing and being paid, the amounts outstanding are recorded as accounts receivables. Suppose you invoice an overseas client for €1,000, and record this as an account receivable of $1,100 (i.e. €1=$1.10). If, at your end-year reporting date the rate has moved to €1=$1.08, and by the payment date it is at $1.05, you would record this as follows:
Bookkeeping entries
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Bookkeeping entries
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