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Translate all foreign currency items into Canadian dollars. Record the rate of exchange on the date the transaction occurred. Record the gains and losses of the translation between currencies.
1:11 30:35 Suggested clip Foreign Currency Transactions | Advanced Accounting | CPA Exam YouTubeStart of suggested clipEnd of suggested clip Foreign Currency Transactions | Advanced Accounting | CPA Exam
A. Such foreign currency transactions must be recorded, on initial recognition in reporting currency, by applying the exchange rate between the foreign currency and the reporting currency to the foreign currency amount at the date of the transaction.
The current rate method can be summarized as follows: Net assets (assets minus liabilities) are at the exchange rates in effect on the balance sheet date. Income statement items are at the weighted average rate in effect for the year except for material items that must be translated at the transaction date.
Go to the Lists menu, then Chart of Accounts. In the Chart of Accounts, right-click anywhere and select New. Choose the appropriate account Type and assign a name. Select Save & Close.
To utilize the Multicurrency function correctly, an Exchange Gain/Loss (Expense type) account must be created in the COA. Then, from the Company tab on the main toolbar, select Manage Currency>Currency List to create a list of currencies used (in your case US $). Next, record (or download) the current exchange rates.
The Plus version of QuickBooks Online supports using multiple currencies. Typically, you use the Multicurrency feature when you sell products and services to customers or buy products and services from vendors whose base currency is different from your home currency.
Foreign currency transaction is the term used to describe all operations conducted by businesses or individuals that are denominated in a currency other than a company's functional currency, or that of the banking office if the subject is an individual.
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