>> March 28, 2009
Question Asked by student
Dear Mr. Vinod
I am Accountant from Kuwait. I have Read About your article On Multi Currency. But it’s Not Solve My Problem. My problem is EXP: We Got a Purchase order of 40000.00 US $. We are doing Business in Kuwait so we are using the currency Kuwaiti Diner KWD. Now according the purchase order we have prepare the invoice 0f 40000.000 but in sales Amount shows as 40000KWD. And please tell me how to set the EXCHANGE Rate. And Is There is any need to change the currency in ledger. I have made change in currency in ledger. But it is not showing any changes in currency showing in account. And sale amount are not shown in debtors a/c is shown on UN adjusted forex Loss / gain. Please help me to get out from this problem.
Answered by Accounting Teacher
You did not tell me which accounting software you are operating. I assume, you have operating tally 9 accounting software for recording above. Now again, I am explaining the complete procedure of recording transaction in multicurrency. I have spent two hours of my worthy time to solve your problem so please , seriously understand and if you did not understand any thing again you can mail me for further explanation , because it will also helpful for your future accounting career .
Ist basic thing
Your journal entry must be as follow
Debtor account Debit 400000 $
Sale Account Credit 400000$
but if you have passing voucher bill by bill , you need not remember this journal entry . you only mention party name and sale ledger . Tally automatically record above entry .
Now, understand the concept
You must keep your base currency as Diner
Allow multi currency in feature F11
Feature >> accounting feature >> allow multicurrency = yes and accept feature form
If you did not allow, then you can not pass the voucher entry in foreign currency.
Create the ledger of Currency
Creation of currencies
You need not make the ledger greation of diner because , it is your base currency and tally automatically create it . you only have to create USA dollar currency
After this fix rate of exchange . For this you have to see current market rate of diner in usa dollar
I have fixed Value of 1 Dollar = 0.29 per Diner according to 28 March 2009 market situation
Because value of diner in currency is more than USA dollar in world market. And show with following way .
After this you will create ledger of your debtors
Suppose ABC company of usa is your debtor and if you want to show currency ledger in usa dollar , then put the symbol of usa dollar as $ and accept the form
And also make sale ledger
And its currency will Diner automatically
You also need to create inventory ledger for recording the items . In inventory lnfo . you have to create
Because with this we can also track your closing stock .
After this pass the voucher entry
1st when company purchase , which is not mention in example , but I have taken an example suppose your company have bought 50000 kg dry fruit at 1 diner per kg and pay 50000 diners .
After this when you sell
Pass the voucher entry in sale voucher
When you show the value in sale voucher , you must write symbol of dollar as $ before showing the amount of sale , tally automatically calculate your currency value in diner . See also picture and understand by yourself . I have mention the two pin points
This is really difficult question . I have happened same problem in earlier query , I already solved same query of another student , so I remember this point .
You can also calculate your forex profit or loss
Display >> trial balance unadjusted forex gain loss >> current asset >> sundry debtor >> choose debtor >> and find the report of forex gain loss
But tally profit will show automatically in your own currency means diner .
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