Business and multiple currencies

[Nigel Titley]

I'm been beating my head against a brick wall for several days over this 
and can't seem to get anywhere.

The scenario is this. I run a small e-commerce business in the UK which 
involves buying stuff in the US, importing it and onward selling it. 
I've got the outgoing side working fine, because I sell in GBP, however 
my suppliers bill me in USD. I'd like to be able to enter my suppliers 
bills in USD, calculate the VAT and then finally convert the payment to 
GBP. What I have tried to do is

1. Create the vendor entry and mark it as being paid in USD
2. Create a VAT tax table and create a VAT liabilities account
3. Enter the vendor bill in dollars

At this point the line at the bottom of the bill gives me totals (for 
bill and VAT) in GBP. Regardless of what I do I don't seem to be able to 
enter a bill in USD. I can go ahead and post the bill and it appears in 
the AR account but with an unbalanced zero split. I've tried creating an 
AR account in USD, I've tried creating Expense accounts in USD to charge 
the individual bill items against all to no avail. The only way I can 
seem to make it work  is to do the whole transaction in GBP, having 
manually converted the bill into GBP first. Am I doing something stupid, 
or is gnucash just not up to what I'm asking of it? I'm running current 
SVN on Fedora Core 3 patched to date.

Please can someone help, even if just to tell me that what I want to do 
is impossible.

Thanks

Nigel