do you need to convert from one currency to another whenever you transfer
funds between accounts well then you should watch this video quickbooks multi-currency
converting and transferring multi-currency funds
if you have any questions about this topic you can leave them in the comments section below and i'll
do my best to help you and of course if you feel the video helped you i hope you will click like
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the most common multi-currency transaction type is a transfer of funds at the moment the funds are
converted to the other currency this is because you must put some money into a bank account
to open the bank account so usually the first transaction is a transfer sometimes there is a
fee and sometimes there is not for example let's imagine on february 18 we purchased
five thousand guyanese dollars at the moment the exchange rate was point zero zero eight of the us
dollar forty u s dollars will be deducted from your bank account at the moment of the transfer
5000 guyanese dollars will appear as the balance of the account in the bank of guyana
forty dollars will be the balance in our trial balance so it's very simple we click
new and go over to the column on the right that says other and we click transfer
now the date of the transfer is february 18. and let's imagine we're transferring from
chase bank us to the bank of guyana now the day that we make the transfer the exchange rate
is point zero zero eight so what are we transferring the amount
now notice the amount that we put will be in terms of the guyanese dollar in terms of the
foreign currency whose bank account we are transferring to that's excuse me that's five
5 000 u.s dollars transferred on february 18. now when we click save and close
or just close it you can see when we click reports
trial balance bank of guyana is worth 40 u.s dollars and chase bank decreased to 2 608 dollars
second example let's imagine on february 19 we purchased five thousand guyanese dollars
at the moment the exchange rate was point zero zero nine of the us dollar forty five
u u.s dollars will be deducted from your u.s bank account at the moment of the transfer
5 000 guyana dollars will increase the balance of the account in the bank of guyana
making 10 000 guyanese dollars in the account and now the account is worth 85 however this
time there is a fee to convert the currency and transfer it to the guyana bank account the fee
is always recorded in terms of the currency of the account that you are transferring to
it is easy to find the amount of the fee because it will be clearly deducted from the account after
the transfer and you can use the checks window to record the fee or in the case of quickbooks
online you could also use the expense window and you would record the fee as a separate transaction
so in our second example let's imagine this transaction but after but during this transaction
they also deducted 200 guyana dollars for the transfer now you have to record the the fee
in a separate transaction so let's ask ourselves what will be the result before recording the fee
well the bank of guyana increases by 45 dollars to become 85 and chase bank decreases by 45 us
dollars and becomes 2563 so that'll be the result before we record the fee
again we click new transfer put the date february 19th we're transferring from chase bank to
the bank of guyana the exchange rate on the day of transfer is point zero zero nine this time
and we're transferring five thousand guyana dollars at point zero zero nine making forty
five u s dollars as the u s dollar equivalent of the amount of this transaction now when you
click save and close you can see the results in the trial balance are exactly as what we
expected bank of guyana became 85 and the chase bank account decreased to 2563. so what will be
the result after we now go back and record the fee well 200 guyana dollars is worth a dollar eighty
so that means that a dollar eighty will decrease the bank of guyana and the balance in the bank of
guyana in terms of u.s dollars will be eighty three dollars and twenty cents and the fees
transfer and exchange fees you see that down here goes from twelve dollars to thirteen dollars
and eighty cents and to do this we will use the checks or expenses window new
expense make sure that the date is the same date as the transfer or the exchange
make sure that the rate is the same as what you recorded a moment ago
and uh the account that the money is coming from is the bank of guyana and the expense there's
no pay in this case or you could put the bank of guyana also on your vendor list as a payee
but a payee is not required and you can just put the transfer and exchange fees transfer
fees expense and again in terms of us in terms of guyana dollars they deducted 200 guyana dollars
out of the bank out of the guyana bank account save and close and the results are exactly as
what we expected when we open the trial balance you can see bank of guyana has decreased to
cents and transfer fees expense has increased to thirteen dollars and eighty cents
now you now have in the bank of guyana five thousand at point zero zero eight
and you have another five thousand of guyana dollars at point zero zero nine
so your bank of guyana has currency that's valued differently in the account right now
you must do a home currency adjustment before transferring the money out of the account
if you forget then your records will not be correct and your currency units
will be out of sync with the balances of the account just like we learned in the prior video
so i think you should take a look at the video for home currency adjustment if you don't remember
the reason why you must make an adjustment before transferring the money out or paying the money out
let's make the adjustment as of march 11 the very next day and let's make them all equal to 0.009
so that on the day that we transfer out we don't have a problem and the whole the amount of home
currency adjustment gain should be five dollars because it's only point zero zero one times the
five thousand that went in at zero zero nine so let's go ahead and adjust it now what will be the
results well the bank of guyana will increase by five us dollars because five thousand out of the
ten thousand units are increasing by point zero zero one and the five dollars actually increases
down here did you see that it increases the exchange gain or loss to be five dollars more gain
again to adjust we click the cog wheel and we go to the column of lists and we click currencies we
go to the row of the guyana dollar and we click the pull down arrow and click re-value currency
now the date will not be march eleventh let's make the date march twentieth
just to be sure that it it is at least one day after the last transaction so that there
is a logical reason to adjust now this window is very temperamental so let's unclick this
to put in the rate that we know it should be and then change the you know you have to keep
unchecking this you're going to get a wrong number so change this to 0.009 push tab and
now you have the correct amount of gain or loss a five dollar gain click revalue and save let's go
trial balance and now you can see the numbers are exactly as what you would expect
the bank of guyana changed to 8820 and the exchange gainer loss became 31. and 30 cents
you