Hello everyone,
I am using Manager Accounting System (MAS) and I am reviewing the foreign exchange gain/loss computation. I am not confident that the software is interpreting Dr and Cr balances correctly for FX revaluation.
Below is an extract from the FX revaluation report:
| Account | Foreign Balance | Exchange rate | Converted balance | Closing balance | Gain / Loss |
|---|---|---|---|---|---|
| A001 - Accounts receivable — Axxela | $575,000.00 | $ 1.00 = GH₵ 11.42 | GH₵ 6,566,500.00 | GH₵ 8,481,250.00 | 1,914,750.00 Dr |
| A011 - Accounts payable — Damazuzu Investement Pty Limited | ($18,570.00) | $ 1.00 = GH₵ 11.42 | - GH₵ 212,069.40 | - GH₵ 951,197.74 | 739,128.34 Cr |
My understanding is:
• For Accounts Receivable, an increase in the local currency value due to FX movement should be an exchange gain
• For Accounts Payable, an increase should be an exchange loss
However, MAS is showing “Dr” for receivables and “Cr” for payables, and I am unclear whether:
-
Dr represents FX loss, and
-
Cr represents FX gain, or
-
MAS is posting the entries from the account’s perspective rather than P&L perspective
Can someone please confirm:
-
Whether Dr = FX loss and Cr = FX gain in MAS FX reports?
-
Whether the software’s FX logic is correct based on the above extract?
Thank you in advance for your guidance.