Recording foreign currency transaction without multiple currencies feature turned on

Software: Intuit QuickBooks accounting software

You received a foreign currency bill for the amount of USD10,000.00. Since you did not turn on the multiple currency feature, you record the bill in SGD. Assuming you decided to use the exchange rate of 1USD to 1.3000SGD, the SGD amount booked will be SGD13,000.00.

QuickBooks - Enter Bill

The exchange rate given by the bank, when you made a TT (Telegraphic Transfer) payment to the supplier, was 1.2345 (SGD12,345.00).

The gain from exchange in this case is SGD655.00 (SGD13,000 – 12,345), you pass a journal (from the Company menu, select Make General Journal Entries) to debit the Accounts Payable account and credit the Exchange Gain/Loss account.

QuickBooks - General Journal

From the Payment transaction window, select the Bill to pay and click the Set Credit button to select the debit journal you had just entered. The amount to pay will show as SGD12,345.00.

QuickBooks - Pay Bill

If there is bank charge involved, you may pass a journal to debit the Bank Charges expense and credit the Bank account or use a Payment transaction to issue a payment from the Bank account to the Bank Charge expense account.

Comments are closed.