Post by MS INYOFU (@theconscience)

ACCOUNTING HINT (FOREIGN PURCHASE BASICS)

When you buy goods abroad, always record the cost using the exchange rate on the invoice date, not the payment date. If you buy goods worth $1,000 at N1,490, record N1,490,000 as Inventory and credit the foreign supplier. This keeps stock value accurate. When paying later, the rate may change. Any increase becomes an exchange loss, and any decrease becomes an exchange gain. These differences must never be added to inventory.

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