Entering foreign-currency transactions in a local account

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Entering foreign-currency transactions in a local account

You can enter foreign-currency transactions in a local-currency account. For example, you can accept a cheque from a customer in pounds and bank it in an Australian bank account.

You have received a cheque from your customer, Donelli Paper, for £5000 against an outstanding invoice, and you want to bank it in your local-currency account. Let’s also assume the exchange rate has changed from $2.5 to $2.3 since you made the original sale.

To bank Donelli Paper’s cheque, you would do the following:

1	Go to the Sales command centre and click Receive Payments. The Receive Payments window appears.

2	Type or select the customer in the Customer field. Details of Donelli’s purchase appear in the window.

3	In the Deposit to Account field, type or select your local-currency account.

4	Click Rate:GBP. The Exchange Rate window appears.

5	In the Transaction Exchange Rate field change the rate from $2.5 to $2.3.

6	Click OK. The Receive Payments window reappears.

7	In the Amount Received field, type 5000.

8	Click in the Amount Applied column and then press Tab.

The Out of Balance field displays £0.00. The Gain/Loss field shows the a loss (in local currency) as a result of the new exchange rate. This amount is posted to a currency gain/loss account.

9	Click Record.

▪	Exchange rates

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