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Foreign Currency Journal

Foreign Currency Journal

I am hoping some of you accountants can explain to me the postings necessary to move funds between two banks accounts in different currencies.

Just a good old fashioned T - Balance type thing.

The computer system I have does not have an Interbank transfer facility such as Quickbooks and from memory, I cannot post directly between bank accounts. I have to use an intermediary.

For example I have a bank account in Sterling and one in Dollars.(Even though it is just an example I think it is best to avoid Euros :-))

I want to move £ 100 to the Dollar account and this will become $150. What are the postings that keep this all in balance? There isn't an exchange / gain or loss that I can see and I am ignoring charges etc.

Thank you for any assistance.

Paul Kelly

www.kellysolutions.co.uk

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29th Jun 2012 08:31

Simples!

SORRY, my OP had the Drs and Crs the wrong way round!  Also I misconstrued the OP, it's early!

SO:- Set your FX rate to GBP = USD 1.50 (assuming that there is a FX facility

Cr GBP £100, Dr Intermediary account

Dr USD $150 (with a narrative stating how many GBP this represents), Cr intermed.

If you were doing it in Excel just have two columns in the USD a/c, one for the books in GBP and one in USD.  Then the GBP column balance  can be revalued at period ends to reflect the value of the USD column at the closing rate.

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By paul.k2
29th Jun 2012 10:12

Follow Up / Clarification

Thank you Richard.  If I could just repeat that back

 

Cr GBP £ 100, Dr Intermdiary £100

Dr USD $150, Cr Intermediary $150

Does this not leave a balance on the Intermediary account that has to be dealt with ?

I am sure this is all pretty obvious to an accountant.

 

Thanks,

 

Paul

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By 3569787
03rd May 2016 17:55

Why an intermediary account??

;

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29th Jun 2012 10:22

IF you have an FX facility

and IF you have set the rate as above, then the post to the inter. for the USD SHOULD be GBP 100.00 to match the GBP entry.

If you tell us which packeage you are using there may be another user on AWEB that can clarify.

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