Learn the top three strategies to handle dual currency transactions in Microsoft Dynamics 365 Finance, including currency revaluation, exchange rate setup, and reporting currency configuration.
Table of Contents
Question
Adventure Works Cycles is configuring their Microsoft Dynamics 365 Finance system to handle transactions in multiple currencies. They need to ensure accurate accounting and reporting in both the local and reporting currencies for international transactions. You need to create a strategy that allows for dual currency handling and accurate currency revaluation. What three actions should you recommend? Each correct answer presents part of the solution. Choose three.
A. Configure accounts for currency revaluation to manage realized and unrealized gains and losses.
B. Define currency exchange rate types and associate them with the appropriate exchange rates for transactions.
C. Eliminate the use of a reporting currency to simplify ledger management.
D. Restrict users from entering transactions in foreign currencies to avoid exchange rate complications.
E. Set up the accounting currency and an additional reporting currency on the Ledger page.
F. Use a fixed exchange rate for all transactions regardless of currency fluctuations.
Answer
A. Configure accounts for currency revaluation to manage realized and unrealized gains and losses.
B. Define currency exchange rate types and associate them with the appropriate exchange rates for transactions.
E. Set up the accounting currency and an additional reporting currency on the Ledger page.
Explanation
Setting up an accounting and reporting currency allows for dual currency recording. Defining exchange rate types ensures accurate conversion of transaction values. Configuring revaluation accounts helps manage gains and losses due to currency fluctuations. Restricting foreign currency transactions is not practical for a global business. Using a fixed exchange rate ignores market fluctuations and can lead to inaccurate financial reporting. Eliminating the reporting currency would reduce the ability to report in compliance with international standards.
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