Trading accounts - when do they make sense?

[Mike Alexander]

--On September 8, 2012 12:10:16 AM +0800 whwtan <whwtan at hotmail.com> 
wrote:

> Say if I were using USD for a month and had it as my primary currency
> in Expenses, that'd be fine. But next month, because I'll be in
> Australia, all my expenses would be in AUD. I am then being prompted
> for exchange rate every single time I enter a transaction...*ouch*
>
> I really love the idea of just being able to enter expenses and just
> use the currency in the expense dialog box but I figure that's going
> to make it extremely difficult to track things down the road.

If you truly have no country that you consider your country of 
residence then I don't know what you do.  In my case I am unambiguously 
a US resident but spend time in other countries.  The primary currency 
of my Gnucash file is USD, but I have income and expense accounts in 
various other currencies.  When entering transactions in foreign 
currencies I use an income or expense account which is in that 
currency.  This seems to work well.  When I am in the UK and using my 
GBP bank account everything is in GBP.  The only time trading accounts 
enter the picture is if I move money between currencies, for example 
use a USD credit card to make a purchase in GPB or EUR or something 
else.

As I said before, this isn't the only way, or perhaps even the best 
way, to do it, but it works for me.  I'm really the wrong person to be 
justifying or explaining how and why this works.  I simply implemented 
Peter Selinger's suggestions in Gnucash since they seemed to make 
sense.  I'm not an accountant and can't explain accounting principles 
well.

          Mike