So im a small business owner. I dont have any background on accounting and i cant balance the balance sheet. I have two bank accounts. One is in USD and one is in Rands( south african currency). Its not really Rands but another currency but lets assume its rands. Revenue, most expenses and start up capital are in USD. Some expenses are in rands. Note ALL TRANSACTIONS ARE THROUGH THE BANK.
My balance sheet needs to increase the loss or increase the assets to balance it. The difference is more than 100k. I dont understand how im missing anything. The only thing i think im doing wrong is chosing the wrong rates for conversion of USD. Maybe im wrong but im just have few questions about the conversion rates. Also note that the rate increased from the time i deposited the start up capital to the end of the year by 6.
- What rates would i use for expenses, start up capital, and revenue in USD?
- If i transafer USD to a fintech application which also uses USD then what rates should i use for the USD that were deposited, USD used for expenses and the closing balance for USD.
- If i dont add Fx gain/loss, will it cause the balance sheet to not balance becuase it effects the profit loss statement.
- If i have to add the Fx gain/loss then how am i suppose to calculate it and for what can i and can i not calculate it. The following are the transcations
Insurance, Revenue, start up Capital, USD sent to Rands bank account for conversion, USD sent to fintech application, USD expenses in fintech, USD Closing balance in fintech, Vehicles purchases, bank charges and other expenses