General Ledger transactions when passing credits / reversing invoices
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?
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.
