US Aged AR Summary does not agree to TB

Here is an example of the problem we are having:
A US invoice is generated for $15000 @ rate of 1.14004 = $17,100.60 CDN
The invoice is then paid in full, and we receive $15,000 US into our CDN bank acct at a rate of $1.1563 = $17,344.50
For some reason, quickbooks does the following
When the payment comes in QB takes $18,105.00 out of a/r (rate of 1.207??) and leaves a cdn balance of $1,004.40 sitting in the ar (US balance of nil), and causing the trial balance and the aged a.r to go out of balance. I end up having to do a home currency adjustment to clear this.
The journal entry quickbooks creates when the payment is received is:
DR bank 17,344.50
CR AR 18,105.00
exch gain/loss - 760.50
The correct entry should be:
DR Bank 17344.50
Cr AR 17100.60
exch gain loss +243.9
When I make the home currency adjustment of $1004.40 I correct the exchange gain /loss to the proper amount. My question is where is quickbooks pulling the 1.207 rate from???

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4 Replies

Faza0

New Member

07/05/06 1:21pm PDT

I have same problem here. Used to have US$ account and closed it about 3 years ago. Actual amount on that account is absolute $0.

Now when I go to this US account report I see:

Foreign Amount and Foreign Balance - both ZERO (which is OK),

Amount and Balance (converted to CAN$) show in both huge amount $10,753.79. That HUGE amount falls into my balance and CRA report since 2003. My questions:

1) How QB Pro created so big 'synthetical' amount?

2) Is there any legal trick to purge this account?

Help please. Thank you.

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Faza0

New Member

07/05/06 6:45pm PDT

I found where QB keeps exchange rates. Do this:

(menu) List -> Currency List and you'll see the column with QB's 'own' rates. One useful feature in connection to that is how to update rates online:

(menu) List -> Currency List -> click on 'Currency' button on low left corner and select 'Download Currency Exchange Rates'.

Now about 'currency adjustment':

QB has a function called 'Home currency adjustment' and QB has a good explanation on its online (embedded) HELP. Just enter the phrase 'home currency adjustment' and you'll find it. Here it is in simple words:

Prepare the Unrealized Gain & Losses report and find your currency data in the column Gain/Loss. This is what you need to correct.

(menu) Banking -> Make General Journal Entries,

In the detail area enter you data (as usual - Debit/Credit). I entered in first line USD account, Credit my amount (that is from Gain/Loss above),

Next line - Exchange Gain Loss account, Debit my amount,

and (IMPORTANT!) put check mark in the box 'home currency adjustment' and do not enter exchange rates, it is not needed for this function.

Now you're done!

To verify, see results of this transactin in the Unrealized Gain & Losses report - Adjusted Balance for that currency should be 0.00 now.

Hope it helps. Cheers!

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Guest

Contributor

07/24/06 12:02pm PDT

I can't help with your problem however, as I am looking for answers too, however, if you contact 'Globex Foreign Exchange', they give a way better exchange rate than the bank and will save you lots of cash. They recieve and wire funds too. www.globexfx.com. They are world wide. I use them, if you send me your contact information I can get my contact there to contact you.(my email: maji101101@yahoo.ca)

What city are you in?

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Faza0

New Member

07/31/06 1:06pm PDT