When we deal with foreign currencies while importing (Purchasing) or exporting (Selling) our goods, we’ll sometime get difference between the amount of our Purchase /Sales invoice and Payment / Receipt due to foreign currency fluctuation rates. We’ll face gain / loss due to these transactions. To explain further with example, assume that you made a foreign sale of 100 nos. of your Men’s Garments at the rate of $43 on 1st Sep 08. So the total value of your invoice amount is $4300/- i.e. Rs.184900/-. But you received $4400/- i.e. Rs.189200/- against this invoice on 25th Sep 2008, due to sudden rise in the dollar value. So, the difference of Rs.4300 would be treated as Forex Gain and gets displayed in the Liabilities side of your Balance Sheet automatically. This amount can be adjusted with the Profit or Loss by passing a Journal with voucher class as explained under.
Create a 'Class' in the normal way (Accounts Info > Voucher Types > Alter > Journal) & name it as ‘Forex Class’. Now pass a journal selecting the class during Voucher Entry. You will find only those Ledger Accounts appearing which have a Gain / Loss to be adjusted as of the date of voucher and auto-calculation of these amounts.
