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Bank Charges Posting Amount Different for 2 Pay Bills but same currency rate

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Question
Enter 2 Pay Bills for US Currency Creditor and rate @3.203 1. PV 0001 - Pay Amount is 960 and bank charges is 9.99 Posting for Bank Charges in Local Currency = RM 32 2. PV 0002 - Pay Amount is 735 and bank charges is 9.99 Posting for Bank Charges in Local Currency = RM 31.99 Why same bank charges amount and same rate, but the posting is different? Note: In customer point of view, Bank Charge 9.99 x 2.203 = RM 32

Answer

The calculation should be this:

PV 0001

Total Pay = 960 + 9.99 = 969.99

Bank Account Credit= 969.99 x 3.203 = RM 3106.88

Creditor Debit = 960 x 3.203 = RM 3074.88

Bank Charges Debit = 3106.88 - 3074.88 = RM 32

 

PV 0002

Total Pay = 735+9.99 = 744.99

Bank Account Credit = 744.99 X 3.203 = RM 2386.20

Creditor Debit = 735 x 3.203 = RM 2354.21 (2354.205)

Bank Charges Debit =  2386.20 - 2354.21  = RM 31.99

This is the right way because there is a rounding issue if user wanted the system to calculate the local value automatically.

The rounding diff. In other system may post to an account call 'Rounding expenses' which is an expenses ac and QnE didn't provide 'rounding expenses', QnE post the diff. To bank charges instead, because both are expenses ac.

The diff. Shouldn't post to bank ac because it will affect the actual bank bal. Also shouldn't post to creditor as it will affect the actual creditor bal.

Thus, we should write off immediately and lump it to the bank charges ac.


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Article Details
Views: 2125 Created on: Aug 07, 2014
Date updated: Aug 07, 2014
Posted in: Delphi

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