Journal Entries of Future of Currency Transactions

 If you are doing the trade of future of currency transaction, it is surely, you have to keep the record of your this trading. With this, you can get whether you get profit or loss from it. It can be possible from journal entries of future of currency transaction. You can do record in any accounting software but you must know fundamentals of these journal entries.

Before journal entries, you must know basic terms of this trade which will be helpful for you.

(A) Future of Currency : It means, you will just buy 1000 foreign currency in minimum 1 lot at current market price but you will not pay the price of this, you just have the right of getting its profit or loss on sale of end of same date. For example today price of 1 USA Dollar is 74.20 and you bought 74200 without paying 74200 in your demat account by selecting cd as Futcur as USDINR but you will not give same amount at the end of date same sold by your broker at 74.50 and you have gained of Rs. 0.30 and your demat account will credit with 1000* .30 = Rs. 300

I am showing one day Rs. 129 loss in screenshot. so, you can understand it very easily.

(B) Margin Advance taken by Broker = broker will take margin advance which will fix daily. For 1 lot, it may be Rs. 2300 to Rs. 3000 which you give as security because you are buying 1000 foreign currency under future. 

(C) Profit and Loss = Profit and loss are of two types.  One is profit or loss on buying and selling of foreign currency daily and second is margin rate fix by Forex department which is connected to your demat account

Ok, now start to pass journal entries which is based on the ledger balance of your DEMAT account

1. When you pay advance margin security or your DEMAT account deduct any extra margin security daily basis you will pass the journal entry

Margin security payment account Debit 

Bank Account Credit 

{ Remember it, it is advance payment and and it is your asset } 

2. When you got daily basis profit, DEMAT account will transfer to your bank account

Bank Account 

Profit on Daily future Currency Asset 

This entry will done on the basis Bill for CDS NSE. Sett No and your broker - FT issued towards credit balance

3. When you got daily basis loss on currency trading, DEMAT account will show negative balance and you have to pay

Loss on Daily future Currency Asset Debit 

Bank account Credit 

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Accounting Education: Journal Entries of Future of Currency Transactions
Journal Entries of Future of Currency Transactions
Accounting Education
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