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Our company purchased plane tickets to the Philippines last February 2020 but because of the pandemic, we were not able to fly and had to request for a refund.
We paid the PHP amounts of the tickets using credit cards. Our cards were charged in USD. We received the refund in USD last December 2020 and realized a gain from the foreign exchange rate. How should we record this gain given that the initial transaction was in USD and Quickbooks would not automatically compute for the forex gain/loss in this case?
I've got some ideas on how to record your refund's gains and losses, @jsedigo2.
QuickBooks Online calculates foreign gains and losses based on the exchange rates. For more information, please check out this article: About exchange rates.
To track them, you'll have to enable the multi-currency feature first. Please note that this option is only available in QuickBooks Online Essentials, Plus, and Advanced versions.
Before doing so, it's best to work with your accountant for the best advice. Don't have an accountant? Don't sweat. You can use our Find-an-Accountant tool to find an expert near you.
Here's how to turn on the multi-currency feature:
- Click the Gear icon, and then select Account and settings.
- Choose the Advanced tab.
- Select the pencil icon in the Currency section, and then choose your Home Currency (US).
- Enable the Multicurrency checkbox, and then confirm that you understand that you can't undo this option.
- Click Save and close.
Then, you can begin adding the PHP currency. To learn more about this, please see this article: Turn-on and use multi-currency.
Also, you can manually enter an exchange rate anytime.
Once you record the payments or refunds, QuickBooks will calculate the gains and losses for you.
If you want to review your gains and losses, you can run some reports. For more details, please go to the Where I can see my gains and losses? section in this article: FAQ about gains and losses.
Click the Reply button if you need more help with managing your transactions. I'll be here to lend a hand.
