72 lines
2.7 KiB
Markdown
72 lines
2.7 KiB
Markdown
All types of accounting entries other than **Sales Invoice** and **Purchase
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Invoice** are made using the **Journal Entry**. A **Journal Entry**
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is a standard accounting transaction that affects
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multiple Accounts and the sum of debits is equal to the sum of credits.
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To create a Journal Entry go to:
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> Accounts > Documents > Journal Entry > New
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<img class="screenshot" alt="Journal Entry" src="{{docs_base_url}}/assets/img/accounts/journal-entry.png">
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In a Journal Entry, you must select.
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* Type of Voucher from the drop down.
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* Add rows for the individual accounting entries. In each row, you must specify:
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* The Account that will be affected
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* The amount to Debit or Credit
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* The Cost Center (if it is an Income or Expense)
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* Against Voucher: Link it to a voucher or invoice if it affects the “outstanding” amount of that invoice.
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* Is Advance: Select “Yes” if you want to make it selectable in an Invoice. Other information in case it is a Bank Payment or a bill.
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#### Difference
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The “Difference” field is the difference between the Debit and Credit amounts.
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This should be zero if the Journal Entry is to be “Submitted”. If this
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number is not zero, you can click on “Make Difference Entry” to add a new row
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with the amount required to make the total as zero.
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* * *
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## Common Entries
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A look at some of the common accounting entries that can be done via Journal
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Voucher.
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#### Expenses (non accruing)
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Many times it may not be necessary to accrue an expense, but it can be
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directly booked against an expense Account on payment. For example a travel
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allowance or a telephone bill. You can directly debit Telephone Expense
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(instead of your telephone company) and credit your Bank on payment.
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* Debit: Expense Account (like Telephone expense)
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* Credit: Bank or Cash Account
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#### Bad Debts or Write Offs
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If you are writing off an Invoice as a bad debt, you can create a Journal
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Voucher similar to a Payment, except instead of debiting your Bank, you can
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debit an Expense Account called Bad Debts.
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* Debit: Bad Debts Written Off
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* Credit: Customer
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> Note: There may be regulations in your country before you can write off bad
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debts.
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#### Depreciation
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Depreciation is when you write off certain value of your assets as an expense.
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For example if you have a computer that you will use for say 5 years, you can
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distribute its expense over the period and pass a Journal Entry at the end
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of each year reducing its value by a certain percentage.
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* Debit: Depreciation (Expense)
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* Credit: Asset (the Account under which you had booked the asset to be depreciated)
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> Note: There may be regulations in your country that define by how much
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amount you can depreciate a class of Assets.
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