See the image below.  This does require the Multi-Currency option to be activated in Setup, Settings, Company, Currency.  If it is not active, you can use the sample file to play with the concepts or create a dummy copy of your live file to test.

Before you post you can see the CAD equivalent in the journal entry on the Report menu.

Hi Richard,

I see the exchange rate box you are displaying in the above image. We do have the Multi-Currency option.

PURCHASE INVOICE: If you enter the exchange rate for the rate on the day you enter the Purchase invoice and the item ordered is an inventory item, will SAGE show the correct profit margins when a sales invoice is created for this inventory item?

So for example, I buy 1 unit at $1200.00 USD that is an inventory item and enter an exchange rate of 1.25 in that box. If I press control+J, it says $1500.00 Canadian.

>>> When I sell the unit, I create a sales-invoice, in this invoice I take this item out of inventory and sell it for $2000 CAD, will it correctly show a profit of $500.00 Canadian?

Yes it should post as you describe it.

Richard S. Ridings said:

you can use the sample file to play with the concepts or create a dummy copy of your live file to test.

This will help you fully visualise and test what will happen and you can follow through with the reporting without affecting your live file.  Then you can go back to your original live file when you have worked out the whole process.

Hi Richard,

I super appreciate your quick responses/help.

I do not know how to use a sample file for testing. Regardless, I am confused as to why the answer to my above question wasn't simply a yes, it will show profit of $500, or no it will not.

Is my question unclear? I really tried to make my question as bare-bones as possible so that I would get a concrete answer from this forum.

Can you please review my previous question/post and possibly give a more detailed or specific answer?

Thank you.

If you make the assumption the item in your example is a brand new item in your file, then Yes.

If the item is one that is already in stock and your inventory costing method is FIFO then your cost on the sale may or may not have been $1500, depending on whether the one(s) already in stock are also worth $1500.  If they are not worth $1500 then the first one sold will be the first one bought, not necessarily the one you just bought for $1500.

If the item is one that is already in stock and your inventory costing method is Average Cost then your cost on the sale may or may not have been $1500, depending on whether the item(s) already in stock are also worth $1500.  If they are not worth $1500 then the first one sold will use the average cost of all items to that point, including the one that just cost $1500.

So you see I took the quick way out with my answer because the parameters of the question were to be assumed and I chose to assume the the easiest scenario.  This is why I could not give you a definitive yes.

As for the sample company, if you have not turned off the Company Window at Startup as in the image below, you can get to the sample file easily.  If you wish, you can create your own dummy file from File, Save As.  If you have turned off the Company Window at Startup, turn it on again when you have your file open, from the View menu.  Then restart the program.

Thank you very much!

Hi Emmusky, if the above suggested answer helped, please do mark it as verified  for the benefit of others in this forum :). Thank you!

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