Creating Journal Entries
Creating a journal entry involves entering the dates of the transactions, the accounts affected by the transaction, and specifying the debit and credit amounts associated with each account. By doing so, you can effectively record a financial transaction. This structured approach ensures the comprehensive documentation of each transaction, facilitating accurate financial reporting and analysis.
Entering the Journal Entry
To create a journal entry, begin by entering the header-level information, such as the posting date, currency, exchange rate, and project/class.
Journal Entry Header Fields
Posting Date
Enter the posting date of the journal entry. Accounts in the entry will record their transactions on this date.
Currency
Enter the currency of the entry. The amount entered into the credit and debit fields will be of this currency.
Exchange Rate
If the currency is not home currency, the exchange rate can be entered here. In the case of home currency, this will be "1".
Reference Number
A reference number for the journal entry can be entered here.
Memo
This field allows you to add any additional information related to the journal entry.
Project/Class
Select a project or class to associate this journal entry with.
Adding Journal Entry Lines
Once the basics are set, you can proceed to add lines to the journal entry, which entails selecting the accounts and the associated amounts, along with the entity (if required). You can also specify if you want to create an adjusting or reversing entry or a home currency adjustment.
Journal Entry Lines Fields
Variance
This field shows the difference between the total debits and the total credits entered (Variance = Total Debits - Total Credits). For a journal entry to be considered balanced and accurate, the variance must be equal to zero. This means that the sum of debits must exactly match the sum of credits.
Amount Type
This field allows you to select whether the entered amount is inclusive or exclusive of taxes. Tax Exclusive applies any taxes (if selected) on the “Amount” field. Tax Inclusive already includes the taxes (if selected) in the “Amount” field.
Account
This field allows you to select an account for this transaction line. If an AP account is chosen, a bill or vendor credit transaction will automatically be generated, depending on the amount. If an AR account is chosen, an invoice or credit memo transaction will be automatically be generated, depending on the amount.
Memo
This field allows you to enter any additional information for the transaction line.
Entry Type*
This field allows you to select the type of transaction to add to the journal entry, debit, or credit.
Amount
Enter an amount here for the transaction line.
Name
If necessary, enter an entity (Customer, Vendor, or Store) to associate with the transaction line.
Project/Class
Select a project or class to associate with this journal entry line.
Store
If necessary, select a store to associate with the transaction line.
Tax
If necessary, select a tax for the transaction line.
Adjusting Entry
Check this box if this entry is used for adjusting.
Create Reversing Entry
Check this box if this entry is used for reversing.
Reverse Entry Date
If this is a reversing entry, select a date here.
Home Currency Adjustment
Check this if it is required to adjust/match the Home Currency amount with the Foreign Currency.
Click on "Add" to add the journal entry line.
After adding the debit and credit lines, click "Save" to create the journal entry.
To delete a journal entry line, click on the "Bin" icon under the "Action" column.
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