Should we actually be using 2 different accounts for exchange gain vs exchange loss? It doesn't matter for the bottom line, net income will end up the same either way:
Hmm... seems you can only configure one for the program to use automatically for adjustments. So when you need to make manual entries, should you have 2 (in Revenue and in Expense) and opt for one or the other on each entry whether it's a Gain or Loss?
- IF exchange/gain loss is a revenue account and it has a negative balance (so deducting from revenue) and then deducting expenses
Sales revenue:: revenue 100,000
Other revenue::exchg G/L -3000
=============
TOTAL REVENUE 97,000
- TOTAL EXPENSE 7000
======================
NET INCOME 90,000
- IF exchange/gain loss is an expense account with a positive balance (so adding to expenses) then deducting the other expenses and this from revenue
Sales revenue:: revenue 100,000
=============
TOTAL REVENUE 100,000
(all other expenses) 7000
exchg G/L 3000
====================
TOTAL EXPENSE 10,000
NET INCOME (100,000 - 10,000) = 90,000
Say you anticipated the currency fluctuations are going to be a gain, so you set up exchg G/L as a revenue. Alas, at end of your period end, it turned out to be a loss!!!
1. What do you do with your GST/HST report on line 101 "sales and other revenue" when your 'other revenue' is a negative. Per this example do you report 100000 or 97000 ?
2. If at period end, exchg G/L is a loss, should you make a J/E to move it to expenses instead (and report the 100,000)? This seems wrong to me - you didn't receive that much $ and you didn't "spend" 10,000.
3. If you have exchg G/L as expense, does it fall under "General & Admin expenses" heading or an "other expenses" heading or ????
