Foreign Customers

Code: 1142
👁 Views: 58

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Receivables from foreign customers

Note: This account may be broken down into sub-ledgers as needed (e.g., customer/supplier/bank names or branches).

Common Journal Entries

Credit sale to foreign customer

Dr. Foreign Customers
Cr. Sales

Received transfer from foreign customer

Dr. Bank Account
Cr. Foreign Customers

Foreign exchange difference

Dr. Foreign Customers
Cr. Foreign Exchange Gain

Sales return from foreign customer

Dr. Sales Returns
Cr. Foreign Customers

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 21 Effects of Changes in Foreign Exchange Rates
US GAAP ASC 830 Foreign Currency Matters

❓ Frequently Asked Questions

Q: What is the foreign customers account?

A: Used to record receivables from customers dealing in foreign currencies or residing outside the country, subject to exchange differences.

Q: How are foreign customer balances revalued at period end?

A: Revalued at the exchange rate prevailing at the balance sheet date, and the difference (exchange gain or loss) is recognized in the income statement.