QBO Multicurrency Management

Question 1

A ProAdvisor turns on Multicurrency for a client's QuickBooks Online company. Which statement about this setting is correct?

Accepted Answer

It cannot be turned off once it is enabled

Answer

Multicurrency is a one-way setting. Once it is enabled it cannot be disabled, so you should confirm the client really needs it first. It is available in higher-tier plans such as Plus and Advanced, and it does not convert existing transactions.

Question 2

A client sells to a customer in Canada and the customer's currency is set to CAD. The company's home currency is USD. What happens when the ProAdvisor creates an invoice for this customer?

Accepted Answer

The invoice is created in CAD and QuickBooks shows the home-currency equivalent using an exchange rate

Answer

Each customer and vendor has one currency. Transactions for that customer are entered in that currency, and QuickBooks uses an exchange rate to report the home-currency value. The ProAdvisor can edit the exchange rate on the transaction if needed.

Question 3

A foreign-currency invoice is paid and the exchange rate on the payment date differs from the rate on the invoice date. Which account records the resulting difference?

Accepted Answer

Realized Gain or Loss

Answer

When a foreign-currency transaction is settled at a different rate than it was recorded at, QuickBooks posts the difference to the Realized Gain or Loss account. Unrealized gain or loss applies to open balances revalued at a reporting date.

Question 4

After a customer already has transactions, a ProAdvisor tries to change that customer's currency from EUR to GBP. What is the expected outcome?

Accepted Answer

QuickBooks does not allow the currency to be changed once transactions exist

Answer

A customer's or vendor's currency is locked once transactions have been recorded. The usual workaround is to create a new customer record in the correct currency.

Question 5

When Multicurrency is on and a client has a EUR-denominated customer, how does QuickBooks handle accounts receivable?

Accepted Answer

A separate Accounts Receivable account is created for each foreign currency in use

Answer

QuickBooks creates a separate A/R (and A/P) account for each foreign currency used, such as Accounts Receivable (A/R) - EUR. This lets balances be tracked and revalued in their original currency.

(QBO) Certified QuickBooks ProAdvisor Practice Test

(QBO) Certified QuickBooks ProAdvisor Practice Test

QBO Multicurrency Management