QuickBooks Online makes it so simple for you to conduct your business wherever possible, even when using foreign currencies. Multicurrency allows you to set up foreign currency accounts, and I'm happy you're taking advantage of this by setting up a USD account. I'd be happy to explain why you're seeing a balance there when the account has a zero dollar total.
This is likely due to unrealized exchange gains or losses. This is caused by a home currency adjustment. Home currency adjustments change the home currency value of your foreign balances, recalculating them based on a new rate. These adjustments affect your balance sheet accounts.
Until you recalculate the home currency value of your foreign balances using current exchange rates, your reports show the home currency value based on the exchange rates you used at the time of each transaction.
Here's a sub-section of the Home Currency FAQ page:
"Unrealized foreign exchange gains or losses are profits or losses that have occurred on paper, due to changes in exchange rates. These gains or losses are only realized after the transactions have been completed, when money has actually been collected or paid.
That is why QuickBooks Online shows the effect of a Home currency adjustment on Accounts Payable or Accounts Receivable as an unrealized gain or loss, and the effect on account types such as bank accounts as a realized foreign exchange gain or loss. Unrealized gains or losses are also not reflected in the general ledger or the trial balance.
You can review the Transaction Detail report for more information about your unrealized gains or losses."
If you'd like an agent to review your account information to confirm if this is why you're seeing a balance in your USD account, feel free to get in touch. It's essential that you're able to resolve any discrepancies.
Have a great day.
First of all, the post referred to QBD not QBO.
Secondly, your response did not provide any way to correct the balances.
Thirdly, I am having a similar issue and it causing my AP subledger to be out of balance with my TB. How can I correct the TB? In my situation, the vendor balance is correct, the TB is incorrect. The issue arose through two foreign currency transactions:
1. a prepayment was issued to a USD vendor at an exchange rate of 1.275
2. the bill arrived a month later at an exchange rate of 1.285
When the bill is entered first, and then the payment, QBD accounts for the gain/loss. But in this instance it has not. How do I correct it?
Thanks for reaching out here in the Community. I'm glad to hear that you're taking advantage of the ability to pay your bills from international suppliers in QuickBooks Desktop. Let me help you account for the discrepancy between your accounts payable and your trial balance.
Entering a bill prepayment for a multicurrency transaction prior to receiving the bill will inevitably cause a discrepancy, as you've identified. This is because the amount owing on the bill reflects the current exchange rate at that time, while you've recorded payment at a different rate. Until the home currency value of your foreign balances is recalculated using current exchange rates, your reports will reflect the home currency value based on the exchange rates used at the time of each transaction. In order to account for this, you can do a currency adjustment or enter an adjustment journal entry.
You can make a Currency Adjustment by selecting the Company menu, then Manage Currency, and Home Currency Adjustment. Select the currency you need to adjust. Update the exchange rate if necessary. By default QuickBooks will use the latest exchange rate listed. Taking this step should help account for the discrepancy as a realized gain or loss. It's important to note that these adjustments will affect your balance sheet accounts.
You can also Create a journal entry in QuickBooks Desktop to adjust for the discrepancy. The steps in the linked article will show you exactly how to create a journal entry, but when it comes to the specifics of which accounts to adjust and for how much, an accountant should be consulted. An accountant may also be able to suggest some alternative ways to account for this discrepancy.
If you're not yet working with an accountant and would like to get in touch with one that is QuickBooks Certified, you can enter your postal code or city at the link below and you'll be directed to accountants near you that are happy to assist. I also encourage accountants in the community to weigh in if they have other suggestions.
Best of luck and have an enjoyable day!