Hi, I'm new to this forum so please bear with me if this question has already been asked. I'm reconciling a bank statement and one of the entries is for an amount for Euros sold. To which nominal account would I post this please?
Thanks for replying so quickly. The Euros were sold from our Euro account and the amount received into our sterling current account as we were closing this particular Euro account.
Wouldnt this be a straight transfer, therefore there would not be an exchange difference, I think that only comes into play if you receive monies sent to you say from a debtor and it differs to the amount on the books. ?
It might do if the accounts system is only single currency and the euros are accounted for at a standard rate when received into the euro bank account and then when transferred you would not be able to receive them into the sterling account at the same amount as the transfer at standard rate eg:
1000 Euros in Euro Bank Account, held in accounts at standard rate of 1.25 = 800 GBP
Actual transfer from Euro Bank Account of 1000 Euros at actual rate 1.20
Cr Euro 1000 Dr GBP 833.33
Accounts package transfer from Euro Bank Account of 1000 Euros at standard rate of 1.25
Cr Euro 1000 Dr GBP 800.00
So there is a exchange diff of GBP 33.33
Hope this make sense, I know it works because I have to do it most weeks just not sure if I have written it correctly.
Ah yes I see what you mean. Indeed I have to do revaluations on our various foreign accounts each month, but I was being blinkered as Sage shows the foreign balance as both and I was thinking in that mode and it does it all for you....doh!
