What account 5210 is for
A foreign buyer transfers dollars to an exporting company. The money lands in the company's foreign currency account at the bank. A currency account at a bank in our country is kept in 5210, while an account at banks abroad is kept in 5220 (para. 227).
Account type and sub-accounts
Group 5200 has type "A" (asset) and contains two accounts: 5210 and 5220. In an asset account the balance and increases are shown on the debit side and decreases on the credit side (NAS No. 21, para. 3). Account 5210 has no sub-accounts; the detail is visible in analytical accounting: under paragraph 228 it is kept separately for each foreign currency account at the banks. If a company has two currency accounts, each of them has its own records.
What goes to the debit side
Under paragraph 228, the debit of 5210 and 5220 shows money coming into foreign currency accounts. For example: payment from a buyer in currency arrived (para. 229, row 2), cash was handed over from the cash desk to the currency account (row 3), an advance was received in currency (row 8).
What goes to the credit side
The credit shows money leaving the accounts. For example: a debt to a supplier was paid (para. 229, row 14), currency was withdrawn into the cash desk (row 12), a loan was repaid (row 19).
An amount posted by mistake
Paragraph 228 has a special rule. If checking the statement reveals an amount that was wrongly posted to your account, it is recorded through 4860 "Claims receivable" or 6960 "Claims payable". Entries in the currency account rest on the bank statement and the documents attached to it.
The official table: paragraph 229
Paragraph 229 gives 21 rows in all for 5210 and 5220. Here they all are:
| No. | Transaction | Dr | Cr |
|---|---|---|---|
| 1 | Lease payment in currency received from the lessee on leased-out fixed assets | 5210, 5220 | 4810, 4820 |
| 2 | Proceeds in currency received from the sale of products, work, services, fixed assets and other assets | 5210, 5220 | 4010 |
| 3 | Handed over from the cash desk to the currency account | 5210, 5220 | 5020 |
| 4 | An unused cheque and letter-of-credit amount transferred to the currency account | 5210, 5220 | 5510-5520 |
| 5 | A loan granted earlier as a short-term investment repaid | 5210, 5220 | 5830 |
| 6 | Advances paid earlier returned | 5210, 5220 | 4310-4330 |
| 7 | The amount of a satisfied claim received | 5210, 5220 | 4860 |
| 8 | An advance received in foreign currency | 5210, 5220 | 6300, 7310 |
| 9 | Share amount received from founders who subscribed to shares | 5210, 5220 | 4610 |
| 10 | Issue income received from shares sold above par value | 5210, 5220 | 8410 |
| 11 | Foreign currency funds placed in an investment | 0600, 5800 | 5210, 5220 |
| 12 | Currency came from the bank into the cash desk | 5020 | 5210, 5220 |
| 13 | Own shares bought | 8610, 8620 | 5210, 5220 |
| 14 | Debt to suppliers and contractors paid | 6010 | 5210, 5220 |
| 15 | An advance paid in currency | 4310-4330 | 5210, 5220 |
| 16 | Advances received earlier returned | 6300, 7310 | 5210, 5220 |
| 17 | Accrued dividends paid to founders | 6610 | 5210, 5220 |
| 18 | Debt on accrued interest settled | 6920 | 5210, 5220 |
| 19 | Short-term loans and borrowings repaid | 6810-6840 | 5210, 5220 |
| 20 | The current portion of long-term loans and borrowings repaid | 6950 | 5210, 5220 |
| 21 | Payment in currency made to the lessor | 6910, 6950 | 5210, 5220 |
In addition, under paragraph 231, transferring money to a letter of credit is shown on the debit of 5510 and the credit of 5210; under paragraph 232, depositing money in a chequebook is shown on the debit of 5520 and the credit of 5210.
A note: the value in soums
The rules for converting an amount in currency into soums and for exchange differences are in NAS No. 22. This note only shows how the accounts link together.
Practical tips
- Reconcile your account with the bank statement. Entries rest on the statement (para. 228), so check the 5210 balance in the ledger against the statement from time to time. If there is a difference, first look for an amount posted by mistake (practical tip).
- A bank currency account is in 5210. Money in a currency account opened at a bank in Uzbekistan is kept in 5210, and in one opened at a bank abroad in 5220 (para. 227) (practical tip).
- Keep each account separate. If you have accounts in two currencies at one bank, do not merge them in analytical accounting (para. 228) (practical tip).
Main journal entries 21
Debit and credit are as in the model table of Appendix 2 to NAS No. 21. The transaction text briefly restates the table row.
| Transaction | Debit | Credit | Source |
|---|---|---|---|
| Currency received from the lessee as lease payments on leased-out fixed assets | 5210, 5220 | 4810, 4820 | NAS No. 21, para. 229, row 1 |
| Money in currency received from the sale of products, work, services, fixed assets and other assets | 5210, 5220 | 4010 | NAS No. 21, para. 229, row 2 |
| Foreign currency cash handed over from the cash desk to the currency account | 5210, 5220 | 5020 | NAS No. 21, para. 229, row 3 |
| An unused cheque and letter-of-credit amount transferred to the currency account | 5210, 5220 | 5510–5520 | NAS No. 21, para. 229, row 4 |
| A loan granted earlier as a short-term investment repaid | 5210, 5220 | 5830 | NAS No. 21, para. 229, row 5 |
| Advances paid earlier returned | 5210, 5220 | 4310–4330 | NAS No. 21, para. 229, row 6 |
| The amount of satisfied claims received | 5210, 5220 | 4860 | NAS No. 21, para. 229, row 7 |
| The amount of an advance received in foreign currency | 5210, 5220 | 6300, 7310 | NAS No. 21, para. 229, row 8 |
| Share amount received from founders who subscribed to shares | 5210, 5220 | 4610 | NAS No. 21, para. 229, row 9 |
| Issue income received from shares sold above par value | 5210, 5220 | 8410 | NAS No. 21, para. 229, row 10 |
| Foreign currency funds placed in an investment | 0600, 5800 | 5210, 5220 | NAS No. 21, para. 229, row 11 |
| Foreign currency cash came from the bank into the cash desk | 5020 | 5210, 5220 | NAS No. 21, para. 229, row 12 |
| Own shares bought | 8610, 8620 | 5210, 5220 | NAS No. 21, para. 229, row 13 |
| Debts to suppliers and contractors paid | 6010 | 5210, 5220 | NAS No. 21, para. 229, row 14 |
| An advance paid in foreign currency | 4310–4330 | 5210, 5220 | NAS No. 21, para. 229, row 15 |
| Advances received earlier returned | 6300, 7310 | 5210, 5220 | NAS No. 21, para. 229, row 16 |
| Accrued dividends paid to founders | 6610 | 5210, 5220 | NAS No. 21, para. 229, row 17 |
| Debts on accrued interest settled | 6920 | 5210, 5220 | NAS No. 21, para. 229, row 18 |
| Short-term loans and borrowings repaid | 6810–6840 | 5210, 5220 | NAS No. 21, para. 229, row 19 |
| The current portion of long-term loans and borrowings repaid | 6950 | 5210, 5220 | NAS No. 21, para. 229, row 20 |
| Payments in foreign currency due to the lessor made | 6910, 6950 | 5210, 5220 | NAS No. 21, para. 229, row 21 |
Example
Qo'qon Mebel Eksport LLC (a fictitious exporting company) has a currency account at a bank in Uzbekistan. All amounts are in US dollars and are taken for illustration only. At the start of the month, 5210 held 8,000 dollars.
| No. | Transaction | Dr | Cr | Amount, dollars |
|---|---|---|---|---|
| 1 | A foreign buyer paid for furniture delivered | 5210 | 4010 | 12,000 |
| 2 | Debt to a supplier paid | 6010 | 5210 | 7,500 |
| 3 | Currency withdrawn from the bank into the cash desk for petty expenses | 5020 | 5210 | 400 |
| 4 | Another buyer transferred an advance in currency | 5210 | 6300 | 3,000 |
| 5 | Debt on accrued interest settled | 6920 | 5210 | 250 |
Source of the entries: 1 is para. 229, row 2; 2 is row 14; 3 is row 12; 4 is row 8; 5 is row 18.
Calculation for 5210:
| Item | Amount, dollars |
|---|---|
| Balance at the start of the month | 8,000 |
| Debit turnover (1, 4) | 12,000 + 3,000 = 15,000 |
| Credit turnover (2, 3, 5) | 7,500 + 400 + 250 = 8,150 |
| Debit balance at the end of the month | 8,000 + 15,000 − 8,150 = 14,850 |
Check: 8,000 + 15,000 = 23,000; 23,000 − 8,150 = 14,850 dollars. Compare the bank statement with this balance. If the difference comes from an amount posted by mistake, under paragraph 228 it is recorded through 4860 or 6960 (example prepared by the author).