mopdf.com

QUICKBOOKS 2016 STUDENT GUIDELesson 14Multicurrency in QuickBooks

CopyrightCopyright 2016 Intuit, Inc.All rights reserved.Intuit, Inc.5100 Spectrum WayMississauga, ON. L4W 5S2Trademarks 2016 Intuit Inc. All rights reserved. Intuit, the Intuit logo, Intuit ProLine, Lacerte, ProAdvisor, ProSeriesand QuickBooks, among others, are trademarks or registered trademarks of Intuit Inc. in the UnitedStates and other countries. Other parties’ marks are the property of their respective owners.Notice to ReadersThe publications distributed by Intuit, Inc. are intended to assist accounting professionals in theirpractices by providing current and accurate information. However, no assurance is given that theinformation is comprehensive in its coverage or that it is suitable in dealing with a client’s particularsituation. Accordingly, the information provided should not be relied upon as a substitute forindependent research. Intuit, Inc. does not render any accounting, legal, or other professional advice nordoes it have any responsibility for updating or revising any information presented herein. Intuit, Inc.cannot warrant that the material contained herein will continue to be accurate nor that it is completelyfree of errors when published. Readers should verify statements before relying on them.

Lesson 16 — Working with Multiple CurrenciesTable of ContentsTable of ContentsLesson Objectives . 4Set Up Multiple Currencies . 5Buying and Selling in Multiple Currencies . 11Review Activities . 15QuickBooks 2016 Student Guide3

Lesson 16 — Working with Multiple CurrenciesLesson ObjectivesLesson ObjectivesTo set up a QuickBooks company file to use multiple currenciesEnter transactions using multiple currenciesQuickBooks 2016 Student Guide4

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesSet Up Multiple CurrenciesWith QuickBooks multicurrency, you can track transactions in more than one currency. Multicurrency affects manyaccounts and balances in your company file and the preference can't be turned off once it's been turned on.QuickBooks and Multicurrency You can assign a currency to customers, vendors, bank accounts, and accounts receivable/accounts payableaccounts. Other account types, like income and expense accounts, always use your home currency.Only one currency can be assigned to each name or account; you'll add a new entry for each currency you'll use intransactions.The multicurrency menu items are in the Company menu under Manage Currency and the feature can be turnedon through preferences.5 Steps to using Multicurrency1.2.3.4.5.Turn on Multicurrency feature - After you turn on the feature, you'll be able to assign a currency to customers,vendors, bank accounts, credit card accounts, and accounts receivable/accounts payable accounts.Add Foreign Customers and Vendors - You can assign one currency for each customer or vendor so you'll createnew customers or vendors to use in your foreign transactions.Add Foreign Accounts - You can assign one currency for each account so you'll create new accounts to use foryour foreign transactions.Update your Exchange Rates - At any time, you can download the latest exchange rates from within QuickBooks.If you prefer to use your own exchange rates, you can manually enter those as well.Create Foreign Transactions - After you've set up your foreign customers, vendors and accounts, you're ready tocreate foreign transactions.QuickBooks 2016 Student Guide5

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesTurn on Multicurrency1.2.3.4.Go to the Edit menu and click Preferences.In the left Preferences list, click Multiple Currencies.Click the Company Preferences tab to display the preferences.Choose your Home Currency.5.After you enable multicurrency, QuickBooks displays the following message to remind you that the featurecannot be turned off. Click Yes.QuickBooks 2016 Student Guide6

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesAdd Foreign Customers and VendorsYou can assign one currency for each customer or vendor so you'll create new customers or vendors to use in your foreigntransactions.1.All existing customers and vendors will be assigned your home currency when you turn on the feature. Thecurrency can't be changed for names that already have transactions recorded against them.2.Continue to use these home currency customers or vendors as you close open balances. You'll use your foreigncustomers or vendors for any new sales or purchases you create but you'll continue to use the home currencynames until you complete any current open transactions.3.Use the Customer and Vendor Centres to create foreign customers or vendors. If a name is already listed usingyour home currency, assign a slightly different name to the foreign customer or vendor that you create.To create a foreign customer:1.2.3.4.5.Go to the Customer CentreClick New CustomerEnter the customer information needed by the business.Choose the customer’s CurrencyClick OK to save the customerNOTE: You are not required to setup the accounts receivable for the foreign currency. QuickBooks automatically sets upthe foreign accounts receivable account.QuickBooks 2016 Student Guide7

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesAdd Foreign Currency AccountsYou can assign one currency for each account so you'll create new accounts to use for your foreign transactions.o All existing accounts will be assigned your home currency when you turn on the feature. The currency can't bechanged for accounts that already have transactions recorded against them.o Continue to use the home currency accounts to complete any open balances. Use the foreign accounts youcreate for transactions after all open balances are closed.o Currencies can be assigned to the following account types: bank, credit card, accounts receivable andaccounts payable.Note: The currency of accounts receivable and accounts payable accounts must match the currency of thecustomer or vendor used in the transaction. QuickBooks will automatically create a separate account for eachcurrency as you create transactions in those currencies.o Use the Chart of Accounts to create foreign bank and credit card accounts as needed.To create a foreign bank account:1. Go to the Chart of Accounts.2. Click Account and then click New.3. Choose Bank and then click Continue.4. Choose the account Currency.QuickBooks 2016 Student Guide8

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesUpdate your Exchange RatesAt any time, you can download the latest exchange rates from within QuickBooks. If you prefer to use your own exchangerates, you can manually enter those as well.Let QuickBooks download the latest rates for you:1.2.3.Go to the Lists menu and then click Currency List.Click the Activities button at the bottom of the windowClick Download Latest Exchange Rates.Note: QuickBooks downloads rates only for active default currencies and you can download rates only if your homecurrency is the Canadian dollar (CAD), US dollar (USD), British pound sterling (GBP), or Euro (EUR).To edit an exchange rate:1.2.From the Currency List, double click the currency.Add the date and the exchange rate for the corresponding date.QuickBooks 2016 Student Guide9

Lesson 16 — Working with Multiple CurrenciesQuickBooks 2016 Student GuideBuying and Selling Items in Multiple Currencies10

Lesson 16 — Working with Multiple CurrenciesBuying and Selling Items in Multiple CurrenciesBuying and Selling in Multiple CurrenciesAfter you've set up your foreign customers, vendors and accounts, you're ready to create foreign transactions.A few things to know about foreign transactions in QuickBooks:oYou don't assign a currency to sales and purchase transactions because they are assigned the currency of thecustomer or vendor you enter on the form.oExchange rates are a part of each transaction and determine the home currency value of the transaction.oAmounts on sales and purchase transactions are in the customer's or vendor's currency and the home currencyequivalent is listed for the transaction total.To create a sale for a foreign customer:From the Home Page, click Invoice.Complete the invoice form.QuickBooks uses the exchange rate on file for the date of the invoice. You can override the amount if you choose.Click Save & Close.QuickBooks 2016 Student Guide11

Lesson 16 — Working with Multiple CurrenciesCreating an Invoice for a Multicurrency TransactionTo create an expense for a foreign vendorFrom the Home Page, click Enter Bills.Complete the Bill form.QuickBooks uses the exchange rate on file for the date of the bill. You can override the amount if you choose.Click Save & Close.NOTESQuickBooks 2016 Student Guide12

Lesson 16 — Working with Multiple CurrenciesReview ActivitiesReceive a Customer PaymentFrom the Home Page, click Receive PaymentChoose the customer in the Received From field.Enter the Exchange Rate if appropriate.Enter the Payment Amount.Click Save.NOTE: If the exchange rate on the Customer Payment window is different from the original customer invoice,QuickBooks will make an entry to the Exchange Gain Loss account to record the gain or lost for the company.QuickBooks 2016 Student Guide13

Lesson 16 — Working with Multiple CurrenciesReview ActivitiesExchange Gain/Loss AccountWhen you enable QuickBooks Multiple Currencies, QuickBooks automatically creates an Exchange Gain or Loss account.The purpose of this account is to record the gains or losses resulting from fluctuating exchange rates. For example, if youcreate an invoice today at an exchange rate of .75 and receive the customer payment in two weeks at an exchange rate of .80, QuickBooks will recognize the difference between the exchange rates and record an entry to the account.View the Exchange Gain or Loss account from the Chart of Accounts.Double click the account to view the entries in the account report.QuickBooks 2016 Student Guide14