Quicken & Other Budget/Accounting Software/Realized Gain / Loss



From our last discussion on the unrealized gain/loss journal entries, i understand that i need to reverse it back on the first day of the next month.

What about realized gain/loss? Do i need to do the same thing?

No, Realized gains are permanent increases or reductions in the amount of the
payable or receivable. This happens because the exchange rate on the date the
payable or receivable was created was different than the date the payable or
receivable was paid.   So no reversing JE is needed since it is a "done deal"

An unrealized gain or loss, is used to restate the balance sheet accounts as of
a given date in time (generally at month end).   The balance sheet accounts are
restated to give the reader of the balance sheet an accurate value for how much
money can be expected if everything were paid on that specific day in time.

However... Everything did NOT get paid as of the last day of the month. You created
an unrealized gain/loss journal entry to help the reader of the balance sheet
see what WOULD HAVE BEEN PAID IF the amounts were paid on that date.  But they were
not.  Which is why you reverse out the journal entry on the 1st day of the next month.

Linda Saltz, CPA
Advanced Certified QuickBooks Advisor

Quicken & Other Budget/Accounting Software

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Linda Saltz, CPA, QBalance.com


QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com


Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
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