Transactions > Transactions - Examples > Recording currency exchange related transactions

To transfer funds from your Canadian dollar bank account to your U.S. dollar bank account you must record two separate transactions, one for the withdrawal of funds and the second for the currency difference.

1. Click Banking on the left and click Bank Transfer.
2. Click New bank transfer and select the Canadian bank account.
3. Click Choose and select the U.S bank account to transfer the money to.
4. Enter the Amount that was withdrawn from the Canadian bank account.
5. Enter a Memo to describe the transaction.
6. Select the Date of the transaction.
7. Click Save.
8. Click New bank transfer again and select the Canadian bank account.
9. Click Choose and select the currency exchange difference account.
10. Enter the Amount of the currency difference.
11. Enter a Memo to describe the transaction, preferably recording the exchange rate of that day.

12. Select the Date of the transaction.
13. Click Save.

 

To record a purchase from the U.S. dollar bank account:

 

This will be entered in two separate transactions. In this example, the U.S currency is worth more than the Canadian currency. It is important to note that the amounts will vary depending on the currency exchange.

 

1. Click the orange Quick Action Menu above and click Withdrawal.

 

 

2. Click Choose and select the supplier.
3. Click Choose and select the U.S bank account.
4. Select the Type EX – Expense and select the account that represents the item(s) you purchased.

 

 

5. Enter the Amount paid in U.S dollars.
6. Review the information, ensuring that the Total amount reflects what was withdrawn from the U.S. account.
7. Click Save.
8. In a new withdrawal transaction window, click Choose and select the supplier.
9. Click Choose and select the currency difference bank account.
10. Select the Type EX – Expense and select same account account as the previous transaction.

 

11. Enter the difference of foreign exchange in the amount box. 
12. Click Save.

 

 

Recording a sale to the U.S. dollar account:


A sale to the U.S. dollar bank account is recorded the same as a purchase from the U.S. dollar account. You must make two entries:

1. One to record the sale:

 

2. One to adjust to Canadian dollars:


 

 

 

Re-valuing the U.S. dollar account at month-end or year-end

You will need to re-value your U.S. dollar bank account periodically. The best time to do this is at month-end and year-end.

 

Multiply your U.S. dollar bank account total by that day’s exchange rate to calculate the amount in Canadian dollars. Then record an adjustment to bring the value of the bank account to Canadian dollars. This difference will be your gain or loss on foreign exchange.

 

It is to note that this entry is dependent on the difference of currency exchange and could be a withdrawal transaction instead.

 

 

 

 

Closing your U.S. dollar account

To close your U.S. dollar account:

 

1. Re-value your account as of the day that it is closed.

 


2. Transfer the funds from your main U.S. dollar account to your chequing account.

 


3. Transfer the funds in the Foreign Exchange sub-account to the chequing account.



 


1.    Click Banking on the left and click Bank Transfer.

Last updated on July 8, 2020 by FCC AgExpert