When setting up a foreign currency, in this case USD, MoneyWorks (MW) will automatically create a US bank account (virtual or real) and you are asked to assign a Unrealized Loss/Gain, Current Liability account and Currency Loss/Gain Expense account to track the loss and gains on transactions to US based customers or suppliers. If you issue invoices or receive invoices from US based customers or US based Suppliers respectively, MW will automatically create a US currency AR and AP account(s). The default Exchange Rate will be 1 to 1.
MoneyWorks will then track the difference in exchange rates on transactions to and from customers and suppliers (Receipts, Debtor/Customer Invoices, Payments and Creditor/Supplier Invoices). Journals however can only be created in base currency and since we provide a full audit trail (why something has occurred) you can not journal to certain system accounts such as AP or AR and you can not journal to the USD designated accounts which are not base currency.
To set up the opening balances for the USD bank you must do a bank transfer from a CAD funded bank account to the US funded bank account. In this example the company had $5,000 CAD in their Canadian bank account and $2,500 USD in their US bank account on the closing day of the old system. For simplicity they treat the initial set up at a rate of 1 to 1 in order to more easily record the set up transactions.
Some customers separate the journal entry into two lines like so, showing the actual CAD funds being entered into the CAD account offset by and entry to SETUPBK on one line and a second amount also to the CAD bank account for the eventual transfer to USD bank account at a 1 to 1 rate also offset to the Set up account.
Then they can do a Transfer Funds.. under the Command menu, as shown below on the next page, transferring the amount to the USD bank at a rate of one to one, since it just easier to figure out. In other words if you have $2,500 USD in you existing USD bank, move it into the CAD bank as $2,500 and then transfer to the USD account at the same 1 to 1 rate.
Then they do a Change Currency Rate.. also under Command to the rate at the actual time of the transaction (in this example an 85 cent dollar) and MW will record the gain in the exchange rate to the appropriate loss/gains account to cover the exchange rate at the then current rate.
The banks are now set for starting the new year or conversion period with the correct funds:
As shown on this Payment entry screen when selecting the bank account and the trial Balance has the correct balances in the banks as well as the calculated conversion to US dollars for statements in base currency etc. all happening in the set up period prior to starting the new system or opening period.