How do you manually zero out or adjust CAD balance in USD account ?

Question

Similar too this post - it seems Sage does an automatic transaction if it finds a 0 balance at year end because it is quite obvious that if an account has $0 US funds in it, it must equate to $0 CA funds... https://sagecity.na.sage.com/support_communities/sage_50_accounting_ca/f/157/t/66784 
 What are the journal entries to do this manually - zero out at any time before year end ? i.e. We periodically transfer our USD PayPal balance to either CAD PayPal or withdraw the funds to our bank acct, leaving $0 in USD PayPal. After so doing, for example, the PayPal USD account in Sage shows as having a balance of $0 in USD but is showing CAD balance $127.52 Dr. We would want it to show $0 in CAD. 
 What are the journal entries to do this manually - adjust at year end when there is a non-zero balance so that USD equates to a proper CAD amount on reports showing both currencies . i.e. If at year end, we will leave a balance of $104.95 in the USD PayPal account to cover an outstanding payable, it is showing $543.03 in CAD as the balance - awkward/wrong since the exchange rate is not 500%+, we would want to have our year ends show in the neighbourhood ~$145 CAD per Dec 30 rate. 
 I am a bit nitpicky with this, I would actually like to do this second type of adjustment monthly when I reconcile all accounts. ... have the month end balances in USD and CAD looking correct per the current month end exchange rate.

Richard S. Ridings · Accepted Answer

JJD 
 
Yes it is true that at year end if there is a USD balance of $0.00 and a CAD balance not $0.00, the program will trigger an internal adjusting entry to zero the CAD balance. Because of this I usually teach at the consultant level a way to trigger a year end without following through with it to alter the balances, but it only works under certain circumstances, so I do not recommend that method for any normal use as you have suggested. 
 
The method I use to make this adjustment is different than Randy but should give the same results and not affect the bank rec in any way either. 
 
I prefer to be explicit in my entries. Therefore I will post two entries with the same date using the USD currency in the General Journal 
 
Let's say I have a US$100 that is a CAD balance of $200. But the real exchange rate is 1.3 so the real CAD balance should be $130. 
 
I will: 
 
Dr Currency Exchange and Rounding Expense US$100 
Cr USD bank $100 
Exchange Rate 2.0 
 
CAD equivalent is $200 and zeros the account for both CAD and USD - check your journal entry report before you post and the General Ledger report using both currencies after you post. 
 
Second entry 
Dr USD bank $100 
Cr Currency Exchange and Rounding Expense $100 
Exchange Rate 1.3 
 
This brings the USD balance to $100 again (no change) and the CAD balance to $130. The bank rec will see $100 on both the deposit and withdrawal sides on the same date with the comment that it was an exchange rate adjustment. The CAD$70 is left in the expense account. 
 
As Randy mentions, two recurring entries can be set up to handle this and make sure you review the journal entry report before you post so you can see both the CAD and USD equivalents. After posting you will see clearly in the general ledger report for that bank account that the balance goes to zero and back up again.

RandyW · Answer

JJD said: it seems Sage does an automatic transaction if it finds a 0 balance at year end because it is quite obvious that if an account has $0 US funds in it, it must equate to $0 CA funds 
 If you choose to revalue your balance sheet at a different exchange rate, $0 USD will display as $0 CAD: 
 
 JJD said: What are the journal entries to do this manually - 
 I don't think there is anything that automatically creates journal entries, so this is the only, manual way: 
 https://sagecity.na.sage.com/support_communities/sage_50_accounting_ca/f/148/p/100591/280104#280104 
 There is an official document somewhere that was written by Sage support, and there may even be something in the help. I wrote that 10 days ago, without bothering to search. 
 JJD said: I am a bit nitpicky with this, I would actually like to do this second type of adjustment monthly 
 I usually set it up as a monthly, recurring, G/L transaction. IFRS rules may only require it at year end, and perhaps only if there is 'significant impairment' of the asset / liability. 
 I hope that helps, please post back.

Sage 50 Canada

How do you manually zero out or adjust CAD balance in USD account ?

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