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Level 2

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

**This is fairly urgent as I am trying to close my year end.  Thank you

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Best answer March 11, 2019

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Level 6

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

Once an account is labeled CAD, it cannot be changed. A new Bank type Account must be created, selecting US $ as the Currency.

To utilize the Multicurrency function correctly, an Exchange Gain/Loss (Expense type) account must be created in the COA.

Then, from the Company tab on the main toolbar, select Manage Currency>Currency List to create a list of currencies used (in your case US $). Next, record (or download) the current exchange rates.

To record a transfer from your CAD bank account to US $ bank account in QB, use the Transfer Funds function from the Banking Menu. Be sure to include the applicable exchange rate. The exchange variance will automatically be recorded in the Exchange Gain/Loss account.

If the US $ account will be used for transactions other than bank transfers, corresponding US $ accounts must be created. For Instance, if payments will be made to US Suppliers, a US $ Accounts Payable Account must be created as well as Vendor Profiles with US $ selected as the Currency used. Same principle applies to Customers and A/R.

You should be aware that although the accounts are now correctly set up, most reports will only be reported in your Home Currency, but can be customized to display US Funds if necessary. The Balances in your COA are displayed in the Currency of the Account.

View solution in original post

4 Comments 4
Highlighted
Level 6

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

Once an account is labeled CAD, it cannot be changed. A new Bank type Account must be created, selecting US $ as the Currency.

To utilize the Multicurrency function correctly, an Exchange Gain/Loss (Expense type) account must be created in the COA.

Then, from the Company tab on the main toolbar, select Manage Currency>Currency List to create a list of currencies used (in your case US $). Next, record (or download) the current exchange rates.

To record a transfer from your CAD bank account to US $ bank account in QB, use the Transfer Funds function from the Banking Menu. Be sure to include the applicable exchange rate. The exchange variance will automatically be recorded in the Exchange Gain/Loss account.

If the US $ account will be used for transactions other than bank transfers, corresponding US $ accounts must be created. For Instance, if payments will be made to US Suppliers, a US $ Accounts Payable Account must be created as well as Vendor Profiles with US $ selected as the Currency used. Same principle applies to Customers and A/R.

You should be aware that although the accounts are now correctly set up, most reports will only be reported in your Home Currency, but can be customized to display US Funds if necessary. The Balances in your COA are displayed in the Currency of the Account.

View solution in original post

Highlighted
Level 6

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

There are several considerations:

Are you using the Multi currency Function? Do you have both Canadian and US Funds Bank Accounts set up in QB? How are the transfers recorded in QB?

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Level 2

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

I just recently turned on the multi currency function and have both Canadian and a US funds bank accounts.  The US funds bank account on my chart of accounts says CAD as I answered this as my home currency.  How can I change it to US for the US account??  I download all transactions from the bank but the transfers if any between the U.S. and Canadian account are show as the amount transferred out for example and then a negative amount for the exchange rate.  Very confusing please help
Highlighted
Level 1

How do I record the exchange on bank transfers from a U.S funds account to a Canadian account so that everything matches up with Quickbooks and the Bank statement?

When it comes to Canadian to US, it can be tricky and can be tricky for the account reconciliation,  so I enter it in by journal entry and not as a transfer as follows:

I chose a USD as the currency with an exchange rate of 1.000, which in reality does no exchange because I record it manually in the entry.

 

I credit the CAD account with the amount of Canadian transferred.  I then debit the USD account with the actual USD amount deposited and debit the exchange rate account with the exchange charged:

 

example: I transfered $300 CAD to a USD account, which on that day gave me $221.77 USD and the exchange charged was $78.23, so I enter as a journal entry as follows:

 

US currency as chose of currency

CAD ACCOUNT credit 300.00

USD ACCOUNT debit $221.77

US exchange Rater Variations debit $78.23

for the Source, I enter Cad to USD and the date

 

It gives me a warning message about using USD in the CAD account but I just click okay and it processes the journal entry.  Since the rate is 1 to 1, it doesn't affect the CAD account other than removing the amount transferred and the reconciliation works.