If you enter the Local currency in the currency field .You can enter the line items in local currency and the system manages the account balance in the local currency and the system currency in parallel. If you enter multi- currency in the currency field .You can enter the line items in any currency . The system manages the account balance only in the system currency and local currency. For multi-currency account account you can conduct external bank reconcillation in the local currency.
B. The system manage account balance in foreign,local and system currency.
E. At any point you can change an account currency to be multi-currency but you will not be able to change it back once you update.