Your client gets a bill from a French vendor for 100 euros on March 1 at an exchange rate of 1.2 dollars to the euro and pays on April 1 at an exchange rate of 1.3 dollars to the euro. What would you see in the Transaction Journal for the bill payment?

The Transaction that to be entered in the Account would be:

Account payable A/c Dr.    130$

     To Bank A/c                              130$

Also,

Profit and Loss A/c Dr.            10$

  To Foreign Exchange Fluctuation loss A/c  10$

Step-by-step explanation:

client received a bill as per question mentioned of 100 Euros on March 1 when the exchange rate is 1 Euro = 1.20 $,

Accordingly the price liable to be paid as on date 1 March is

100 Euro × 1.20= 120 $ .

Further, the client is agreed to pay the amount on the April 1 when the exchange rate stands out at 1.30 $, that specifies that the client now has to pay the extra price due to the exchange rate fluctuation i.e.

(1.30 - 1.20)$ = 0.10$ to the French vendor.

Therefore , the Transaction that to be entered in the Account would be:

Account payable A/c Dr.    130$

     To Bank A/c                              130$

Also,

Profit and Loss A/c Dr.            10$

  To Foreign Exchange Fluctuation loss A/c  10$

answer: f true

step-by-step explanation: