How Foreign Currency Journals are Balanced
Whenever you enter a foreign currency journal on the Create Subledger Journal Entry page or spreadsheet, the system automatically calculates any currency exchange gain or loss and records it as a balancing line.
This ensures that the journal entry is always balanced, and that any exchange gains or losses are tracked and reported accurately. The system takes into account current exchange rates when calculating the gain or loss.
When suspense is not enabled, currency gain or loss balances are automatically rounded to a user-defined rounding account. You can transfer currency exchange gain or loss balances to another account using a manual journal entry.
When suspense is enabled, the system will still record currency gains or losses against the suspense account.
Some advantages:
- Supports manual journal entries with currency exchange gains and losses.
- Automatically record currency gains and losses when entering foreign currency
journals.Note: Define a rounding account for the ledger to record exchange gains and losses automatically.
Line | Account | Accounting Class | Currency | Entered Debit | Entered Credit | Accounted Debit (USD) |
Accounted Credit (USD) |
1 | 01-000-1140-0000-000 | Accrual | SGD | 130 | 265.85 | ||
2 | 01-000-1150-0000-000 | Accrual | SGD | 50.00 | 102.50 | ||
3 | 01-000-1160-0000-000 | Accrual | SGD | 40.00 | 82.00 | ||
4 | 01-000-1170-0000-000 | Accrual | SGD | 10.00 | 20.50 | ||
5 | 01-000-1130-0000-000 | Accrual | SGD | 30.00 | 61.50 | ||
Total | 265.85 | 266.50 |
Line | Account | Accounting Class | Currency | Entered Debit | Entered Credit | Accounted Debit (USD) |
Accounted Credit (USD) |
1 | 01-000-1140-0000-000 | Accrual | SGD | 130 | 265.85 | ||
2 | 01-000-1150-0000-000 | Accrual | SGD | 50.00 | 102.50 | ||
3 | 01-000-1160-0000-000 | Accrual | SGD | 40.00 | 82.00 | ||
4 | 01-000-1170-0000-000 | Accrual | SGD | 10.00 | 20.50 | ||
5 | 01-000-1130-0000-000 | Accrual | SGD | 30.00 | 61.50 | ||
6 | 01-000-7826-0000-000 | Balance | SGD | 0.00 | 0.65 | ||
Total | 266.50 | 266.50 |
Let's take a look at some more examples:
Example 1 -Both unrounded and rounded accounted amounts are not balanced. Suspense enabled.
Account | Currency | Rate | Entered Debit | Entered Credit | Unrounded Debit | Unrounded Credit | Accounted Debit | Accounted Credit |
01- E1 | EUR | 1.465 | 1170.85 | 1715.29525 | 1715.30 | |||
01-E2 | EUR | 1.465 | 17.69 | 25.91585 | 25.92 | |||
01-E3 | EUR | 1.465 | 54.88 | 80.3992 | 80.40 | |||
01-E4 | EUR | 1.465 | 5599.14 | 8202.7401 | 8202.74 | |||
01-E5 | EUR | 1.465 | 5599.14 | 8202.7401 | 8202.74 | |||
01-E6 | EUR | 1.465004 | 12441.70 | 18227.14027 | 18227.14 | |||
01-suspense | EUR | 1 | 0 | 0.0497668 | 0.04 | |||
12441.7 | 12441.70 | 18227.14027 | 18227.14027 | 18227.14 | 18227.14 |
Example 1 - Both unrounded and rounded accounted amounts not balanced that infers currency gain or loss. Suspense not enabled- Single BSV
Account | Currency | Rate | Entered Debit | Entered Credit | Unrounded Debit | Unrounded Credit | Accounted Debit | Accounted Credit | |
01- E1 | EUR | 1.465 | 1170.85 | 1715.29525 | 1715.30 | ||||
01-E2 | EUR | 1.465 | 17.69 | 25.91585 | 25.92 | ||||
01-E3 | EUR | 1.465 | 54.88 | 80.3992 | 80.40 | ||||
01-E4 | EUR | 1.465 | 5599.14 | 8202.7401 | 8202.74 | ||||
01-E5 | EUR | 1.465 | 5599.14 | 8202.7401 | 8202.74 | ||||
01-E6 | 1.465004 | 12441.70 | 18227.14027 | 18227.14 | |||||
01- rounding (level1) | 0.0497668 | 0.05 | |||||||
01- rounding(level 2) | 0.01 | ||||||||
12441.7 | 12441.70 | 18227.14027 | 18227.14027 | 18227.15 | 18227.15 |