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JJD4
Level 1

Quickbooks Year End Foreign Account Register does not match the Year End Balance Sheet balances

I have what appears to be a common problem in that my year end balance sheet totals for the foreign bank accounts do not match the register year end totals.  The register balances are correct and have been reconciled month by month with no issues.  The problem is in the drafting of the Balance Sheet.  My home currency is SRD so when I run the Balance Sheet for my USD checking I should have an ending balance of $37,893.36 as per the register but instead I get a Balance Sheet of ($33,477.01) which is a very big swing to just be an exchange rate issue.  I did customize the report for this account to see the exchange rate for each transaction and there no crazy exchange rates listed.  There are also no open transactions and the beginning balance in the registers is correct.  My company file and the Balance Sheet are both set to Calendar year.  I can do a year end general journal entry to the Exchange Rate Gain and Loss account to fix this problem however as the debit account in these transactions is the actual bank account it throws off the ending balance in the register by the same amount.  I could enter the reverse general journal entry on January first to rectify the registers and start the new year off in balance but I am not sure this is the correct accounting for this problem. 

 

Thanks in advance for any and all feedback.

3 Comments 3
JessT
QuickBooks Team

Quickbooks Year End Foreign Account Register does not match the Year End Balance Sheet balances

Hi JJD4,


By default, the balances in the Chart of Accounts are based on the accounts’ currencies. On the other hand, the Balance Sheet is based on your home currency (SRD). This is why you’ll notice that some accounts do not have a matching figure. This isn’t wrong. The report is just giving you figures based on SRD.


You can add a column that shows the SRD equivalence of your COA balances. That way, you’ll see where the balances on your report are coming from. I’ve made a sample below.
 

To add the column:

  1. Go to your Chart of Accounts.
  2. Right-click anywhere and choose Customize Columns.
  3. Move the Balance (SRD) and Balance Total (SRD) to the chosen columns.
  4. Click OK.

The result will be like in the screenshot below.

 

 

Let me know if you still need help tracing the figures of your reports. Have a good day!

JJD4
Level 1

Quickbooks Year End Foreign Account Register does not match the Year End Balance Sheet balances

Thanks JessT for the timely response, much appreciated.

 

I added the columns to my Chart of Accounts as instructed and yes it confirms where the system is pulling the year end balances from however it does not change the fact that the balance sheet numbers are still way off.  For your reference my Checking USD Year End register balance is 284,200.20 SRD and the Balance Sheet is reflecting a negative 251,077.56 SRD, that is a 535,277.76 SRD swing.  I am assuming the problem is an exchange rate issue over time but wonder if the system is doing something I am missing.  All the individual transactions have an exchange rate between 7.5 and 8 SRD.  Note this is a running company file spanning three years 2017 through 2019.  In short we need to determine why the Balance Sheet appears to be using a lower average exchange rate rather than the correct rates reflected in the individual transactions  or is the problem something completely different?

Catherine_B
QuickBooks Team

Quickbooks Year End Foreign Account Register does not match the Year End Balance Sheet balances

Thanks for the update, JJD4. 

 

It's possible that there were transactions which weren't included. Thus, made a large difference on both reports. We can run the reports with the same Date Range and choose Accrual as the Accounting Method. 

 

We may need to record a Currency Adjustment to resolve the discrepancy. It changes the home currency value of your foreign balances and the adjustments affect your balance sheet accounts. I suggest reaching out to an accountant before doing the process so they can help you decide what's best for your business preference. 

 

Let me show you how: 

  1. Select Company from the menu.
  2. Choose Manage Currency.
  3. Click Home Currency Adjustment

 

Please let us know if there's anything else you need help with. 

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