How to Record a Foreign Currency Exchange Transaction Performed for a Hotel Guest
Recording the receipt of foreign currency and disbursement of local currency with the exchange commission as revenue.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Hand (USD) | Asset (+) | 100.00 | - |
| Cash in Hand (Local) | Asset (-) | - | 95.00 |
| Exchange Commission Revenue | Revenue (+) | - | 5.00 |
💡 Accountant's Note
Many hotels provide currency exchange as a service, making a small margin on the exchange rate.
Practitioner & Systems Framework
💻 ERP Architecture
Hotels with a money-changing license (required in most jurisdictions including Jordan) earn a spread on the exchange. The foreign currency received (USD) is an asset in the foreign currency cash account; the local currency disbursed reduces the local cash account; the margin is Exchange Commission Revenue. At month-end, revalue the USD cash balance at the closing exchange rate — the FX gain/loss goes to P&L. Maintain a foreign currency cash position report and reconcile to the physical count daily.
⚠️ Audit Flags
Currency exchange operations require a money-changing license — auditors confirm the license is valid and current. Jordan's Central Bank regulates hotel currency exchange activities. FX gains/losses on the USD cash balance must be recognized at each reporting date. Systematic over/under-counting of foreign currency creates fraud opportunities — physical counts of FX cash must be verified by a second party.
📄 Required Documentation
Money-changing license (current and valid), exchange rate applied (comparing to the reference rate), exchange transaction log, foreign currency cash account balance, month-end FX revaluation entry, physical foreign currency count sheet, Central Bank of Jordan reporting (if required), and Commission Revenue reconciliation.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.