CWIP Clearing amount recognized in prepaid advance account

Summary:

Content (please ensure you mask any confidential information):

Hi,

We have come across the below scenario (foreign currency trx);

(All amounts in ledger currency)

1. PO Entered and received

CWIP Clearing A/C Dr 128.05

Accrual A/C Cr 128.05

2. PO matched prepay invoice

Prepaid A/C Dr 127.73

CWIP Clearing A/C Dr 0.10

Liability A/C 127.83

3. Invoice and prepayment applied

3.1 Invoice - Accrual A/C Dr 128.05

Liability A/C Dr 1.03

Liability A/C Cr 128.05

CWIP Clearing A/C Cr 1.03 (For exchange rate variance)

3.2 Prepay application - Liability A/C Dr 127.02

Exchange Loss A/C Dr 0.81

Prepaid A/C Cr 127.83

Please find concerns below;