General Ledger transactions when passing credits / reversing invoices

Ianinfinance

The following transactions appear when passing credits / reversing invoices:

Sales and Receivables journal:

Dr Sales $100

Dr GST collected $10

Cr Trade Debtors $110

No problem with that - perfect logical sense.

BUT

a second entry with a different reference also appears on the Sales and Receivables Journal:

Dr Trade Debtors $110

Cr Trade Debtors $110

 

Why the second entry which to me is superflous. I am advised by my asistant that she is not processing the second entry- it appears automatically.  Is there something we are missing? 

 

Mike_James

Hi @Ianinfinance , every accountable transaction in AccountRight creates a journal entry behind the scenes, so settling Credits in Sales, and settling Debits in Purchases, both create this journal. Apart from being a good audit trail, one good reason for having a journal is so that a transaction chain can be undone, for example an invoice partly credited and paid will involve 4 journals:

- invoice

- payment

- credit

- settle credit

This chain can be undone if necessary by deleting from the most recent transaction as far back as necessary. This allows the transactions to be re-recorded correctly (if required).

 

The display of history for any credit will therefore show the invoice which it was settled against, also useful to know/find.