US purchases to CAD inventory amounts

Question

We purchase most of our inventory in USD, but our sales are in Canadian. 
 Our inventory is all entered in Canadian dollars, but they have been entered at a 1 to 1 basis. So for example, it we pay $1200.00 USD for an item, and the cost of the inventory item is showing as $1200.00 CAD. 
 My understanding is that this will skew the numbers for our profits and show that we are making more money then we are. 
 Where is the conversion entered?

Richard S. Ridings · Accepted Answer

If you make the assumption the item in your example is a brand new item in your file, then Yes. 
 If the item is one that is already in stock and your inventory costing method is FIFO then your cost on the sale may or may not have been $1500, depending on whether the one(s) already in stock are also worth $1500. If they are not worth $1500 then the first one sold will be the first one bought, not necessarily the one you just bought for $1500. 
 If the item is one that is already in stock and your inventory costing method is Average Cost then your cost on the sale may or may not have been $1500, depending on whether the item(s) already in stock are also worth $1500. If they are not worth $1500 then the first one sold will use the average cost of all items to that point, including the one that just cost $1500. 
 So you see I took the quick way out with my answer because the parameters of the question were to be assumed and I chose to assume the the easiest scenario. This is why I could not give you a definitive yes. 
 As for the sample company, if you have not turned off the Company Window at Startup as in the image below, you can get to the sample file easily. If you wish, you can create your own dummy file from File, Save As. If you have turned off the Company Window at Startup, turn it on again when you have your file open, from the View menu. Then restart the program.

Richard S. Ridings · Answer

See the image below. This does require the Multi-Currency option to be activated in Setup, Settings, Company, Currency. If it is not active, you can use the sample file to play with the concepts or create a dummy copy of your live file to test. 
 Before you post you can see the CAD equivalent in the journal entry on the Report menu.

Sage 50 Canada

US purchases to CAD inventory amounts

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