General Knowledge · General Awareness
Consider the following statements regarding foreign exchange accounting in banks: Statement I: A 'Vostro Account' is our bank's account held with a foreign bank abroad, and its mirror account is used to record entries in local currency. Statement II: At the time of month-end revaluation, any 'Unrealized Loss' must be debited to the Profit and Loss account, while 'Unrealized Gains' are also recognized in the P&L. Statement III: The exchange rate used for converting inward remittances (like a family transfer from abroad) is the 'TT Selling Rate'. Statement IV: The 'Forex Position Account' is a memorandum account used to track the net open position in each foreign currency. Statement V: According to FEDAI, banks must use the 'Closing Mid-rate' for revaluing their open positions at the end of the day. Which of the following option combinations is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All statements are correct.
- 2Only IV and V
- 3Only II and IV✓
- 4Only I and II
Correct answer
Only II and IV
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