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how to do journal entries Multiple currency in Tally
Multiple currency journal entries

how to do journal entries Multiple currency in Tally

how to do journal entries Multiple currency  in Tally

With the advent of globalization, using multi-currency has become a necessity for companies

involved in International Trade business. Starting from transactions to viewing of reports, multi currency
support is required. And most importantly, adjusting Forex Gain/Loss is one crucial activity to generate an accurate Profit/Loss account statement. Handling these processes with a rate of exchange that fluctuates regularly is quite a challenge. However, Tally.ERP 9 provides a comprehensive multi-currency support that allows recording of transactions in multi-currency,
specifying the rate of exchange and automatic calculation of Forex Gain/Loss with extremely simplified adjustment for the same.

Example of multiple currency

  1. started business with capital Rs. 50,00000 on 1 April 2015
  2. Deposited into Bank Rs 25,00000.  on 2 April 2015
  3. Purchased Digital Camera 20 digital cam @ 150$ each from Sony USA on 10/4/15
  4. standard rate Rs 60 /$,buying rates Rs 60 /$ and selling rate Rs 60 /$.
  5. if payment is made within 40 days a Cash discount @ 10% is allowed .
  6. Payment is made on 1/5/15 and rate of dollar is Rs 58

In the above example

create in a company in tally and the follow the following instruction

  • Got to gateway of tally > F11 > F1
  • set activate multiple currency set to Yes
  • maintain bill wise detail also set to Yes
  • activate multiple currency
  • now go to gateway of tally > Accounts info > currency
  • currency
  • select currencies
  • tally multiple currency

In the above screen

  • Create currency $ (press Sift+4)
  • formal name to be type : dollar
  • symbol for decimal portion of amount : cent
  • create ledger Sony USA
  • under
  • creditor ledger in tally
  • now go to gateway of tally > accounts info > currency > alter >select $ from the list
  • now following screen will appear
  • alter multiple currency
  • in the above screen in the standard date : put the date and dollar amount
  • similarly put the selling and buying date in other field.
  • Go to accounting vouchers F9 purchases
  • now put the details as mention below and in amount in Put dollar sign  by pressing shift + 4 ( $)and put dollar amount 150
  •  purchase in multiple currency in tally
  • multiple currency purchase
  • here to put dollar sign tally automatically convert it into rupees so total purchase here is $ 3ooo
  • rate of dollar is 60 therefore $ 3000 X 60 = Rs 180,000 purchase form Sony USA
  • now the payment is to made to Sony ltd on 1 may 2015
  •  now payment is made before 40 days therefore a cash discount of 10% is allowed by Sony ltd  which is $1500 X 10% thats comes to $ 150
  • this discount received is income for us therefore it will be shown under discount received A/c
  • Go to accounts info > create ledger > discount received > under > indirect income
  • discount received under multiple currency
  • Go to accounting voucher > F5 payment change the date to 1/may 2015 and
  • payment in multiple currency in Dr side select the ledger Sony Usa and put $ 1500 in the debit side a new screen appear here put the rate of exchange Rs 58 the amount will be now
  • $ 1500X58 = 87000
  • In the credit side select the ledger discount received as $ 150 because 10 % of $ 15000 = $150
  • now pur the rate of exchange as rs 58 therefore $150X 58 = rs 8700
  • now create sbi bank account and put the dollar as $ 1350 as it is the amount to be paid rate of exchange is rs 58
  • Go to gateway of tally > Balance sheet
  • unadjusted forex gain in balance sheet
  • Go to accounts info > accounting vouchers > alter > journal
  • and in the name of the class Type : forex gain loss class
  • new screen appear SET : use class for forex gain loss YES
  • save it
  • unadjusted forex gain loss in tally erp class
  • create new ledger  forex gain under indirect income
  • go to accounting vouchers > F7 journal and select  forex gain and loss class
  • forex gain in multiple currency tally
  • now accounts : select = Forex gain
  • and in the particular side select Sony USA amount is automatically adjusted in the entry
  • after passing the above entry the forex gain is adjusted and will be shown under new account forex gain under indirect income

 

 

 

 

Multiple currency with cash discount in tally erp
Example :

  • company : Indian international
  • started business with cash Rs 1000000 on 1 april 2015
  • deposited into bank Rs 500000 on 2 april 2015
  • Purchase digital Camera web cam @ 150 $ each from sony ltd usa on 14 /4/15.
  • Standard Rate Rs 60/$ buying rate Rs 60/$ and selling rate 60/$.
  • if payment is made within 15 days @ Cash discount @ 10% is allowed .
  • Payment is made on 24 /4/15 and dollar rate was 55/$ bank charges being 50$
  • record following entries in tally erp

Solution :

now to record the following transaction following ledger need to be prepared :

Name of ledger Under Inventory value are affected Maintain bill wise detail
Capital A/c Capital NA NA
Purchase A/c Purchase YES NA
Sony USA Sundry creditor NO YES

 

Now go to gateway of tally > F11 >F1> select multiple currency set to YES

multiple currency example with cash discount

  • Now go to gateway of tally > select accounting info >select multiple currency > select create
  • under create currency
  • Symbol of dollar : set as $(press shift+f4 key
  • formal name : TYPE : dollar
  • Word used for the decimal portion of the amount : cent
  • Press CTRL +A to save
  • Now go to gateway of tally > select accounting info >select multiple currency > select alter
  • Now in rate of exchange set standard rate : date :1/4/15 and type dollar rate : 60
  • similarly in buying rate date :1/4/15 : 60
  • similarly in selling rate date : 1/4/15 : 60
  • alte currency in tally erp
  1. Now make journal entry of

Cash A/c     1000000

To capial a/c 100000

(being business started)

2. Now deposited cash in to bank Rs 50000

Bank A/c   500000

To cash A/c 500000

(being cash deposited into bank)

3. purchase 10 nos Sony  camera from Sony USA for $ 150 each.

now when in purchase voucher in tally while typing amount put $ symbol before 150

A screen appear

rate of For ex : $150.00/nos exchange :

purchase in dollar in tally

 

rate of fores screen :

rate of forex screen in tally

now following ledger is to made before payment is made

Name of ledger Under Inventory value are affected
Discount received Indirect income no

as payment is made with in 15 days therefore cash discount is received

now journal entry for the payment will be

Sony USA dr  $1500

To cash discount received A/c  $150

To bank A/c   A/c      $ 1350

(being cash discount received and payment made to party)

now journal entry for payment of bank charges as bank charges is expense for us therefore in order to make its journal entry

Leger of bank charges is to made

Name of ledger Under Inventory value are affected
Bank charges A/c Indirect expense no

payment with discount received

Journal entry for the same will be :

Bank charges a/c Dr $ 5

To bank A/c $5

(being bank charges paid)

Also See :Group in Tally

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