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Definition: Foreign Currency Account (FCA)
Foreign Currency Account (FCA) is an account in a bank in which financial transactions happen in a currency other than the domestic currency. The account can be operated in the same country or any country abroad.
Accounting for foreign currency transactions has two parts.
The first part deals with recording the original transactions. The second part deals with recording the transaction when the company pays or receives the money in a foreign currency. The foreign currency exchange rate permits the accountant to translate the foreign currency to his domestic currency. Any changes in the foreign currency exchange rate will translate to a gain or loss on the foreign currency.
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