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Debtors and creditors adjustments can also be used for foreign currency gains or losses.
This simple example assumes that a particular account is both a vendor and a customer, and that the amount owed to the vendor is reduced by NZD40.00 to contra AUD38.42 owed by the customer.
Using this same example, it is conceivable that the two accounts (the creditor and debtor) are different cardfiles, as in the case of an overseas supplier (vendor) having a local office trading under a different name (customer).
Transfer a balance from a creditor in currency X to a debtor/creditor in currency Y using Adjustments Up and Adjustments Down.
The example above shows a Creditor Adjustment Down for NZD40.00.
The default exchange rate for NZD is at 1.0412.
This creates a NZD40.0 creditor credit, ready to apply.
Looking at the Transaction Journal created for this adjustment, Jim2 has calculated the equivalent value in home currency as AUD38.42 and moved to the adjustment account in the general ledger.
To complete the contra payment, record the Debtor Adjustment Down.
This creates a AUD38.42 debtor credit, ready to apply.
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