Is letter of Credit recorded under Bank as restricted cash or under current assets? Assume the company has deposited the funds into a CD to get the letter of credit. What is the JE to book it?

mmali1979

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• Mar 16th, 2010

Dr. to Bank Gurantee A/cCr. to  Particular Bank A/c.Being Certain amount deposited in a bank  for bank Gurantee for certain time/period.Once transaction finished pls reversal the same entry.Dr. to Particular Bank A/cCr. To Bank Gurantee A/c

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Is a software company with no office in UK required to apply for VAT registration and why? Assume this company sells through an affiliate that sells in the UK and there are VAT or taxes withheld. Is this the way to get those taxes withheld back?

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vijay.rathinavel  

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• Member Since Mar-2010 | Mar 10th, 2010

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The Money Behind a Letter of Credit.
A bank promises to pay on behalf of a customer, but where does the money come from? The bank will only issue a letter of credit if they know the buyer will pay. Some buyers have to deposit (or already have) enough money to cover the letter of credit, and some customers use a line of credit with the bank. Sellers must trust that the bank issuing the letter of credit is legitimate.

Sandeep Sahu

• Nov 10th, 2011

A letters of credit is a contingent liability of a particular bank and a contingent liability is shown as foot note of the balance sheet

prashanth Ghodke

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• Mar 21st, 2010

Credit purchase means purchase account dr to party account cr.

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