Trial balance doesn't match balance sheet by the amount of foreign AR/AP

Hi there,

Glad to hear from you again. I trust that all is well on your end.  Trying to figure out why your Balance Sheet isn't matching your Trial Balance can be time-consuming, but don't worry, you're in good hands. I'll be happy to assist you with this so you can continue managing your books with ease. 

QuickBooks is a versatile program which offers a variety of features that help you streamline your work. Based on what you've described above, did you create USD journal entries on your account? The reason I ask this is that these journal entries aren't affected by a revaluation and this causes a difference between your Trial Balance and Balance Sheet. 

Feel free to get back to me in the comments below. I'd glad to help get you back on track ASAP. 

Hi James,

Thanks for your reply.  I've noticed that I have 2 journal entries other than the monthly currency revaluations.

The first entry was to reduce the Opening Equity Balance and AR I had before the beginning of the year when I started to enter date into QBO.

The second was to create an item on my Balance Sheet for a USD cash investment, I created an entry for an asset and a liability.

These were early in the year.  How should I resolve this without journal entries or in a manner that will be captured accurately when I revalue currency at the end of every month?

Edit:  Added screenshot.  Is this screen of the journal entry created by revaluing currency normal?  None of the revaluations adjust the USD AR/AP, it's just $0 as a placeholder.  The discrepancy between Trial Balance and Balance Sheet started on the first date I entered a currency revaluation?

Is this just a quirk of QB that the Trial Balance shows the un-revalued amount and the Balance Sheet shows the revalued amount.  If you click and open up the details, the USD amount and un-revalued amount are the same, but the revalued amount going through the Balance Sheet shows the revalued amount.

Thanks.

Thanks for taking the time to look through your books to find these entries, JonSWR. I can appreciate why you chose to use a journal entry in these instances and I want to make sure you're able to sort this out so you can move forward with your entries in QuickBooks Online.

For this sort of situation, I recommend consulting an accountant. They'll be able to advise you not only on how to best handle this situation but also how to best record these kinds of entries moving forward if there's another way you can consider doing it. An accountant that's familiar with QuickBooks Online would be ideal, since they'll also know the options available in the program.

I have a feeling we may have shared the details about how to connect with an accountant using QuickBooks Online at one point or another, but I want to make sure that you have these details for certain.

The My Accountant tab is the place to go when it comes to working with an accountant in QuickBooks Online. There, you can use the email invite field to invite your accountant as a user or the Find a pro to help button to find someone to work with you. Don't hesitate to take advantage of this option, for which there is no extra cost. Working with an accountant is a superb way to ensure ultimate accuracy in your books.

See you next time you stop by Community!

Hi Laura,

Thanks for your reply.  I'm trying to get some direction from my accountant but there are some other hurdles I face there too. 

Part of my question is not related to accounting, it's related to QBO.  

The Trial Balance shows the un-revalued amount in CAD for USD funds, while the Balance Sheet shows the revalued amount.  Is this typical of how QB reports these values?  There are other instances in which I find it frustrating how QB reports values for USD, and I want to know if this is a similar quirk of QB. 

Is the Trial Balance designed to show the un-revalued amount in CAD, and the Balance Sheet designed to show the revalued amount in CAD?

Thanks,

Jon

Hi there JonSWR and thank you for getting back to us on this thread. Understanding the data that is populated by the reports in QuickBooks Online is essential in order to appropriately extrapolate it and see where your business stands. I want to expand on the difference you're seeing between the Trial Balance report and the Balance Sheet.

The Trial Balance as you've stated, is showing you the un-revalued amount in CAD as a trial is a projection, and QuickBooks isn't able to project exchange rates. When the report is pulled, QuickBooks can only know the current and historical rates as per when the transactions were entered.

When it comes to the Balance Sheet, in general terms, it's meant to show the actual value currently held, which as you know, requires revaluing foreign currencies. This is why the Balance Sheet report that you're running is showing you the revalued amount in CAD that you expect to see.

I hope this information is helpful and clears things up for you. Have a great evening! 

A trial balance is a trial and can’t project fx? lol. Don’t answer questions if you don’t know the very BASIS of accounting! Your financial statements are built off your Trial Balance. If there are discrepancies something is wrong! 

this is 100% a glitch in qbs that I have dealt with for 8 years now. I created my own AR usd revaluation account and my own AP usd revaluation account as well as my own unrealized exchange gain loss account and every time I revalue my foreign currrncy, I open the balance sheet and look at the amounts showing for ap and ar and then book the difference between that and what is showing on the (incorrect) trial balance to those respective new accounts I created with the other side going to unrealized fix. 

what’s nuts is that the unrealized amounts for foreign cash, credit cards, and any other assets and liabilities all get booked to Exchange gain Loss without a problem when you do the valuation(even though these are Unrealized but quick books mashes them in with the realized fx …it’s a mess!)

I book it separately to my Unrealzied Gain Loss account simply so it’s easy for me at each period to open my Profit & Loss statement, click to enable Unrealizes Gain Loss, and then the P&L shows the quickbooks Unrealized fx gain loss line and I can make sure it matches what I booked to my Unrealized Gain Loss account. This isan extra check to make sure everything reconciles. Took me years to figure this all out and come up with this method but I can tell you it works! 

And sorry for posting four years later, just happened to come across this blog and remembered when I was looking for answers years ago there were no blogs that properly helped or answered my question and helped me figure out what the heck quickbooks was doing (am I frustrated with the amount of time I’ve spent looking into this quick books glitch? Yes lol) So hopefully this helps someone out there!