114 lines
4.0 KiB
Markdown
114 lines
4.0 KiB
Markdown
# Journal Entry
|
|
|
|
All types of accounting entries other than **Sales Invoice** and **Purchase
|
|
Invoice** are made using the **Journal Entry**. A **Journal Entry**
|
|
is a standard accounting transaction that affects
|
|
multiple Accounts and the sum of debits is equal to the sum of credits.
|
|
|
|
To create a Journal Entry go to:
|
|
|
|
> Accounts > Documents > Journal Entry > New
|
|
|
|
<img class="screenshot" alt="Journal Entry" src="/docs/assets/img/accounts/journal-entry.png">
|
|
|
|
In a Journal Entry, you must select.
|
|
|
|
* Type of Voucher from the drop down.
|
|
* Add rows for the individual accounting entries. In each row, you must specify:
|
|
* The Account that will be affected
|
|
* The amount to Debit or Credit
|
|
* The Cost Center (if it is an Income or Expense)
|
|
* Against Voucher: Link it to a voucher or invoice if it affects the “outstanding” amount of that invoice.
|
|
* 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.
|
|
|
|
#### Difference
|
|
|
|
The “Difference” field is the difference between the Debit and Credit amounts.
|
|
This should be zero if the Journal Entry is to be “Submitted”. If this
|
|
number is not zero, you can click on “Make Difference Entry” to add a new row
|
|
with the amount required to make the total as zero.
|
|
|
|
* * *
|
|
|
|
## Common Entries
|
|
|
|
A look at some of the common accounting entries that can be done via Journal
|
|
Voucher.
|
|
|
|
#### Expenses (non accruing)
|
|
|
|
Many times it may not be necessary to accrue an expense, but it can be
|
|
directly booked against an expense Account on payment. For example a travel
|
|
allowance or a telephone bill. You can directly debit Telephone Expense
|
|
(instead of your telephone company) and credit your Bank on payment.
|
|
|
|
* Debit: Expense Account (like Telephone expense)
|
|
* Credit: Bank or Cash Account
|
|
|
|
#### Bad Debts or Write Offs
|
|
|
|
If you are writing off an Invoice as a bad debt, you can create a Journal
|
|
Voucher similar to a Payment, except instead of debiting your Bank, you can
|
|
debit an Expense Account called Bad Debts.
|
|
|
|
* Debit: Bad Debts Written Off
|
|
* Credit: Customer
|
|
|
|
> Note: There may be regulations in your country before you can write off bad
|
|
debts.
|
|
|
|
#### Depreciation
|
|
|
|
Depreciation is when you write off certain value of your assets as an expense.
|
|
For example if you have a computer that you will use for say 5 years, you can
|
|
distribute its expense over the period and pass a Journal Entry at the end
|
|
of each year reducing its value by a certain percentage.
|
|
|
|
* Debit: Depreciation (Expense)
|
|
* Credit: Asset (the Account under which you had booked the asset to be depreciated)
|
|
|
|
> Note: There may be regulations in your country that define by how much
|
|
amount you can depreciate a class of Assets.
|
|
|
|
#### Credit Note
|
|
|
|
"Credit Note" is made for a Customer against a Sales Invoice when the
|
|
company needs to adjust a payment for returned goods. When a Credit Note
|
|
is made, the seller can either make a payment to the customer or adjust
|
|
the amount in another invoice.
|
|
|
|
* Debit: Sales Return Account
|
|
* Credit: Customer Account
|
|
|
|
#### Debit Note
|
|
|
|
"Debit Note" is made for a Supplier against a Purchase Invoice or accepted
|
|
as a credit note from supplier when a company returns goods. When a Debit
|
|
Note is made, the company can either receive a payment from the supplier or
|
|
adjust the amount in another invoice.
|
|
|
|
* Debit: Supplier Account
|
|
* Credit: Purchase Return Account
|
|
|
|
#### Excise Entry
|
|
|
|
When a Company buys good from a Supplier, company pays excise duty
|
|
on these goods to Supplier. And when a company sells these goods to Customers,
|
|
it receives excise duty. Company will deduct payable excise duty and deposit balance
|
|
in Govt. account.
|
|
|
|
* When a Company buys goods with Excise duty:
|
|
* Debit: Purchase Account
|
|
* Debit: Excise Duty Account
|
|
* Credit: Supplier Account
|
|
|
|
* When a Company sells goods with Excise duty:
|
|
* Debit: Customer Account
|
|
* Credit: Sales Account
|
|
* Credit: Excise Duty Account
|
|
|
|
> Note: Applicable in India, might not be applicable for your Country.
|
|
Please check your country regulations.
|
|
|
|
{next}
|