Differences between the actual amount received and the amount recorded in QuickBooks accounting software

Software: Intuit QuickBooks 2015 accounting software

Due to the differences in exchange rate, the amount received in the home currency bank, which has transferred from a foreign currency bank account, could be different from the amount recorded in the QuickBooks accounting software.

Assuming you transferred USD15,000 from a US dollar bank account, which is a foreign currency account, to a home currency bank account; SGD20,137.48 is received in the home currency bank account. 

QuickBooks 2015 allows up to 5 decimal places in the exchange rate between the US dollar and the Singapore dollar. The nearest exchange rate you can use for this transfer is 1USD:1.34250SGD; hence, SGD20,137.50 is debited to the QuickBooks home currency bank account. 

QuickBooks Transfer Funds

Since the amount recorded in QuickBooks (SGD20,137.50) is different from the actual amount received in the bank (SGD20,137.48), a home currency adjustment journal is needed to adjust between the home currency value of the foreign currency bank account and the amount recorded in the home currency bank account.  Pass a home currency adjustment journal to debit SGD0.02 to the foreign currency bank and credit SGD0.02 from the home currency bank.

A home currency adjustment journal is a journal to adjust the home currency value; therefore, the foreign currency balance of the foreign currency bank account remains unchanged. Whereas the home currency equivalent value of the foreign currency bank account increase by SGD0.02 and the home currency bank account has reduced to SGD20,137.48 (SGD20,137.50 – SGD0.02), which is the actual amount received in the home currency bank.

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