Multi-Currency Module Q & A

1) Will the Multi-Currency module handle transfers between different currency accounts?

Yes! The Multi-Currency module can handle transfers between different currency accounts. When making transfers between different currency accounts with journal entries, you'll use GL trading accounts to help keep track of currency gains and losses. Visit the Multi-Currency overview to learn more about trading accounts.

2) What currency will be assigned for sales and expense GL entries when a customer invoice or vendor bill is in a different currency?

All sales and expense entries will be made in the base currency. The currency conversion will be recorded in a trading account.

An example sales invoice entry set in euros with a base currency of US dollars will look like: 

3) What account type should the GL Currency Trading Account be?

It should be an Other Income and Expenses account named for example Exchange Gain or Loss or EUR-USD Trading Account. It should not be an Asset or Liability account since the trading account shows the amount of gain or loss in currencies and affects your net profit.