Advances to Foreign Suppliers

Code: 1146
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Account Information

Account Type Statement of Financial Position
Normal Balance Debit

Definition

Amounts paid in advance to foreign suppliers before receiving goods

Common Journal Entries

Pay advance to foreign supplier

Dr. Advances to Foreign Suppliers
Cr. Bank Account

Settle advance on foreign goods receipt

Dr. Purchases
Cr. Advances to Foreign Suppliers

FX difference on foreign supplier advance

Dr. Advances to Foreign Suppliers
Cr. Foreign Exchange Gain

Recover advance from foreign supplier

Dr. Bank Account
Cr. Advances to Foreign Suppliers

Pay advance to foreign supplier

Dr. Advances to Foreign Suppliers
Cr. Bank Account

Settle advance on foreign goods receipt

Dr. Purchases
Cr. Advances to Foreign Suppliers

FX difference on foreign supplier advance

Dr. Advances to Foreign Suppliers
Cr. Foreign Exchange Gain

Recover advance from foreign supplier

Dr. Bank Account
Cr. Advances to Foreign Suppliers