Solution of Multi Currency Accounting Problem

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.

from Accountant

Answered by Accounting Teacher

Dear Student,

Good Evening

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
1st Condition

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.

2nd Condition

Create the ledger of Currency

It means

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

unit measurement

stock items

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

Remembering that

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

By going

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 .






access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Finance Journal Entries Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: Solution of Multi Currency Accounting Problem
Solution of Multi Currency Accounting Problem
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock