Bank/CC to Expense, diff currencies

[Derek Atkins]

Hi,

Ken Runge <kr at bell.net> writes:

> Thanks for your input. Let me start by relating an experience from a training
> session I attended many years ago. At that event one of our group (me) was
> given a simple diagram and asked to describe it to the others of the group
> such that, unseen by them, they could draw it. It was a hopeless and utter
> failure! This is what is happening to me now. I simply have no idea what you
> are saying.
>
> "Transfer" referes to the "Transfer Account".  In a basic register it's
> the "other" account (to balance the transaction).  If you're in an
> expanded transaction mode it referes to the account tied to the specific
> split on that line."

It sounds like you're not quite understanding the basics of double-entry
accounting.  Every balanced transaction must have at least two splits, a
Debit and a Credit, which balance out.  It models moving money from one
place to another, e.g. you buy $100 of groceries with your credit card,
so you Credit your Liabilities:Credit Card account $100 and then Debit
Expenses:Groceries that same $100.

When you open an account register, you're tying all transactions back to
that account.  It also hides the second split, since it can be mostly
inferred from the primary.  So when you enter a transaction you're
e.g. debiting the "register account" and then crediting the "Transfer
Account", which is the *other* account in the second split of the
transaction.

> If I use the basic register and select the expense account and enter CND
> amount as a debit on the single line of the register, the expense and USD cc
> amounts are reversed.

NOTE: It's possible this behavior has changed recently.  Historically
the register shows you values in the current account currency.  I.e., if
you have a USD account open, then it will show you all values in USD.
Then you need to use the exchange-rate dialog to convert that to any
foreign currency amounts.  It's POSSIBLE that this changed, however.  In
basic mode it definitely shows values in the local account currency.

What account register are you opening here?  Are you opening your USD CC
account?  Or the CND Expense Account?  (Do I have that right -- you
haven't been completely explicit about what you're opening/doing).  The
register would give you values in that currency and expect you to enter
them in that currency.

If the amounts are reversed then you're possibly entering them in the
wrong columns.  Are you doing that?

> Is there any reason not to just convert the expense into your local
> currency?
>
> And just how do I do that?

Simple math.

When I travel to a foreign country I just manually convert the foreign
transactions back into USD and use my USD Asset/Liability and Expense
accounts.  So let's say I pay €100 for a hotel room.  I'd figure out
exactly how much that is in USD (e.g. $125.34) and then I'd enter a
transaction for that USD amount.  I'd notate the transaction to remind
me it was €100, but all *numbers* are all in USD.

> Thanks anyway
>  
>

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available