JJD

Yes it is true that at year end if there is a USD balance of $0.00 and a CAD balance not $0.00, the program will trigger an internal adjusting entry to zero the CAD balance. Because of this I usually teach at the consultant level a way to trigger a year end without following through with it to alter the balances, but it only works under certain circumstances, so I do not recommend that method for any normal use as you have suggested.

The method I use to make this adjustment is different than Randy but should give the same results and not affect the bank rec in any way either.

I prefer to be explicit in my entries. Therefore I will post two entries with the same date using the USD currency in the General Journal

Let's say I have a US$100 that is a CAD balance of $200. But the real exchange rate is 1.3 so the real CAD balance should be $130.

I will:

Dr Currency Exchange and Rounding Expense US$100
Cr USD bank $100
Exchange Rate 2.0

CAD equivalent is $200 and zeros the account for both CAD and USD - check your journal entry report before you post and the General Ledger report using both currencies after you post.

Second entry
Dr USD bank $100
Cr Currency Exchange and Rounding Expense $100
Exchange Rate 1.3

This brings the USD balance to $100 again (no change) and the CAD balance to $130. The bank rec will see $100 on both the deposit and withdrawal sides on the same date with the comment that it was an exchange rate adjustment. The CAD$70 is left in the expense account.

As Randy mentions, two recurring entries can be set up to handle this and make sure you review the journal entry report before you post so you can see both the CAD and USD equivalents. After posting you will see clearly in the general ledger report for that bank account that the balance goes to zero and back up again.

JJD

Yes it is true that at year end if there is a USD balance of $0.00 and a CAD balance not $0.00, the program will trigger an internal adjusting entry to zero the CAD balance. Because of this I usually teach at the consultant level a way to trigger a year end without following through with it to alter the balances, but it only works under certain circumstances, so I do not recommend that method for any normal use as you have suggested.

The method I use to make this adjustment is different than Randy but should give the same results and not affect the bank rec in any way either.

I prefer to be explicit in my entries. Therefore I will post two entries with the same date using the USD currency in the General Journal

Let's say I have a US$100 that is a CAD balance of $200. But the real exchange rate is 1.3 so the real CAD balance should be $130.

I will:

Dr Currency Exchange and Rounding Expense US$100
Cr USD bank $100
Exchange Rate 2.0

CAD equivalent is $200 and zeros the account for both CAD and USD - check your journal entry report before you post and the General Ledger report using both currencies after you post.

Second entry
Dr USD bank $100
Cr Currency Exchange and Rounding Expense $100
Exchange Rate 1.3

This brings the USD balance to $100 again (no change) and the CAD balance to $130. The bank rec will see $100 on both the deposit and withdrawal sides on the same date with the comment that it was an exchange rate adjustment. The CAD$70 is left in the expense account.

As Randy mentions, two recurring entries can be set up to handle this and make sure you review the journal entry report before you post so you can see both the CAD and USD equivalents. After posting you will see clearly in the general ledger report for that bank account that the balance goes to zero and back up again.

Thanks Richard, I like your method better than the Sage recommended $1 at 49,342.61:1, then reversed at 1:1 thing.