How are exchange differences dealt with?
This is best described with an example. We have a sales ledger account with an invoice of $100.00, posted with exchange rate of 1.64 = 60.98 GBP. We then post a remittance of $100.00 at exchange rate 1.72 = 58.14 GBP. The sales account shows 58.14 GBP Unallocated and a Balance of 2.84 GBP. When the transactions are allocated to each other, the sales Unallocated goes to 0.00 GBP, the sales ledger account balance goes to 0.00, and a nominal journal for 2.84 credits the Debtors account and credits the Exchange Difference control account.
