understanding currency exchange...

[Wm...]

Tue, 10 Nov 2015 11:53:59 <56424B57.70503 at gmail.com>
Joshua Chambers <chambers.joshua at gmail.com> wrote...

>Okay, so I still can't get the currency exchange dialog to work in a way
>that makes sense to me.  I've just re-read the tutorial it all, and I
>must say it lacks screenshots of what the transactions look like after
>the currency exchange dialog... let me give a simple example and please
>point out what I'm doing wrong.
>
>I have two asset accounts...
>
>-Assets:Exchanges:Benjamin (USD)
>(a friend who I made a small loan to)
>
>and...
>
>-Assets:Holdings:Cash:Euros (EUR)
>(my holdings in Euro cash, of course I have one for dollars too, but it
>isn't relevant here)

I'm presuming the (USD) and (EUR) mean you've told gnc amounts held in 
those accounts are in amounts of those currencies rather than say just 
changing the account names.  One way to check is to produce a balance 
sheet, it'll show amounts in either USD and EUR or both depending on 
your base currency.  If you show the Commodities column in your Accounts 
list you should see the "thing" that gnc is counting for that account.

>Now, I understand that in double entry accounting, all the accounts need
>to be balanced against each other.  I've been using gnucash for years
>now to keep track of my personal accounts and some non-profits and I
>really like it and get it!
>
>However, with different currencies, two different "numbers" are actually
>of equal value... so in the case of the small loan I made to my friend,
>he paid me back when I visited him in Austria, paid me back in Euros...
>and the rough exchange rate we made at the time (close to the current
>one), is he owed $500 and paid EUR450 back.  These were equal (and still
>roughly are).  That is an exchange rate of 0.9.

Hang on a sec.

By agreeing a number of EUR and a number of USD were equal you and your 
friend established an exchange rate, the fact that it approximates a 
commercial or tourist exchange rate isn't important except in you being 
fair to each other about the small loan.

Onwards.

>So I go to enter this transaction into gnucash (newest version 2.6.9)...
>no matter what exchange rate I enter in the exchange rate dialog,

there is your problem, don't enter an exchange rate.  Enter the two 
amounts, each in their own currency, gnc will work out the exchange rate 
for you.

> once I
>come back to the transaction I still cannot have those two be the only
>parts of the transaction,

You should have.  If it is not right then something else is up.

> I am still left over with "50" to deal with,
>but there shouldn't BE 50 anythings left over, because 500USD = 450EUR @ .9!

Correct, there shouldn't be anything left over.  Let's take a look:

>Account                                    Debit           Credit
>Assets:Exchanges:Benjamin    USD500
>Assets:Holdings:Cash:Euros                         EUR450
>(this is where I'm asked to balance it with another account, and if I
>leave it blank, it becomes "Imbalance-USD")

You shouldn't be asked for another account.  gnc *knows* what to do with 
different amounts when there are different currencies, it creates the 
necessary exchange rate for the transaction to have happened.

>So please tell me I'm missing something.  I would expect that there
>needs to be some indication in the transaction what the exchange rate is
>that allows them to balance up.  I would really appreciate your insight
>on this confusion of mine.

I think you haven't set the appropriate Security/Currency for the 
accounts, you're make a transfer between two accounts *of the same 
Currency* and as a result gnc asks, "where the do you want me to put the 
left over money, boss?"

NB: change the security/currency/commodity setting on the accounts!

-- 
Wm...