Tally is a popular accounting software that is widely used by businesses to manage their financial transactions. One of the features of Tally is the ability to record foreign currency transactions and automatically calculate forex gain or loss. However, sometimes the calculated forex gain or loss may not be accurate, and adjustments may need to be made. In this article, we will discuss how to adjust unadjusted forex gain or loss in Tally.
What is Forex Gain/Loss?
Forex gain or loss is the difference between the exchange rate at the time of a foreign currency transaction and the exchange rate at the time of settlement. If the exchange rate at the time of settlement is higher than the exchange rate at the time of the transaction, it results in a forex gain. On the other hand, if the exchange rate at the time of settlement is lower than the exchange rate at the time of the transaction, it results in a forex loss.
Why Adjust Unadjusted Forex Gain/Loss in Tally?
Tally automatically calculates forex gain or loss based on the exchange rates entered at the time of the transaction. However, there are several reasons why the calculated forex gain or loss may not be accurate. For example, the exchange rate used at the time of the transaction may not be correct, or the exchange rate used at the time of settlement may be different from the exchange rate used at the time of the transaction. In such cases, adjustments need to be made to correct the unadjusted forex gain or loss in Tally.
Steps to Adjust Unadjusted Forex Gain/Loss in Tally
Step 1: Create a New Ledger Account
To adjust unadjusted forex gain or loss in Tally, you first need to create a new ledger account. To do this, go to the “Accounts Info” menu and select “Ledgers.” Click on “Create” to create a new ledger account.
Step 2: Name the Ledger Account
Name the new ledger account as “Forex Gain/Loss Adjustment” or any other name that you prefer.
Step 3: Set the Group
Set the group of the new ledger account as “Indirect Expenses.”
Step 4: Set the Currency Type
Set the currency type of the new ledger account as the same as the foreign currency used in the transaction.
Step 5: Record the Transaction
To adjust the unadjusted forex gain or loss in Tally, you need to record a journal entry. To do this, go to the “Gateway of Tally” and select “Accounting Vouchers.” Click on “F7” to open a new journal voucher.
Step 6: Enter the Voucher Date
Enter the voucher date as the date on which you want to adjust the unadjusted forex gain or loss.
Step 7: Enter the Particulars
In the “Particulars” field, select the ledger account that you want to adjust. In this case, select the “Forex Gain/Loss Adjustment” account that you created in step 1.
Step 8: Enter the Amount
Enter the amount of the unadjusted forex gain or loss that you want to adjust in the “Amount” field.
Step 9: Select the Forex Gain/Loss Ledger
In the “Particulars” field, select the “Forex Gain/Loss” ledger account.
Step 10: Enter the Amount
Enter the amount of the unadjusted forex gain or loss that you want to adjust in the “Amount” field.
Step 11: Save the Journal Voucher
Save the journal voucher by clicking on “Enter.”
Step 12: View the Adjusted Forex Gain/Loss
To view the adjusted forex gain or loss, go to the “Display” menu and select “Trial Balance.” Select the foreign currency ledger account that you want to view, and you will see the adjusted forex gain or loss.
Conclusion
Adjusting unadjusted forex gain or loss in Tally is an important task for businesses that engage in foreign currency transactions. With the steps outlined in this article, you can easily adjust unadjusted forex gain or loss in Tally and ensure that your financial statements are accurate. As with any financial transaction, it is important to review and verify the accuracy of your adjustments before finalizing your financial statements.
