At the end of the financial year, your accountant might want you to record journal entries for things such as depreciation of your computer or company car. As these are likely to be just “book adjustments” (there’s no cash or other party involved), you would record them as general journal entries.
General journal entries are different to other transactions in AccountRight. In the Record Journal Entry window (Accounts command centre > Record Journal Entry) you need to:
- specify at least two accounts that require adjusting
- enter at least one of the amounts as a “debit” and another as a “credit”
- ensure that the total debit and credit amounts in the entry are equal.
Your accountant can help you work all this out, but if you need a quick refresher, here’s a guide to choosing whether an amount is entered as a debit or credit in the Record Journal Entry window:
|For accounts of this type...||Record an increase as a...||Record a decrease as a...|
|5-xxxx Cost of Sales||Debit||Credit|
For example, say you want to record depreciation expenses for your company car. The two accounts that are affected are:
|Account||Account type||Increase or decrease?||Debit or credit?|
|1-2320 MV - Accum Dep’n||Asset (but it has a negative balance)||Decrease (because it has a negative balance)||Credit|
To record a general journal entry
- Open the Record Journal Entry window (Accounts command centre > Record Journal Entry).
- Enter the date of the entry. Most end-of-financial-year adjustments are recorded as at 30 June for Australia, or 31 March for New Zealand.
- Enter a memo describing the journal entry, for example “Depreciation for the 201x financial year".
- In the Acct No. field, select one of the accounts you want to adjust.
- Enter the amount you want to adjust in the appropriate column—Debit or Credit (see the table above as a reference).
- If the entry relates to a job, enter the job number.
- If you want to record a comment about the account you’ve selected, enter it in the Memo column.
- If the entry affects your BAS (GST) return, select the appropriate tax GST code. Otherwise, leave the Tax (GST) column blank, or select the N-T Not Reportable code.
- On the next row, select another account that you want to adjust and then complete the relevant details for each column.
If the entry involves more than two accounts, continue to add rows for each account.
- If you selected codes in the Tax (GST) column other than N-T, select whether the adjustment relates to sales or purchases:
- Click Record.
What’s a Year-End Adjustment?
If you need to record an adjustment as at 30 June (Australia) or 31 March (New Zealand) that relates to the full financial year (depreciation is a good example), you might not want that adjustment to be included in your June (March) financial reports, because it could distort your results.
If you select the Year-End Adjustment option in the Record Journal Entry window, you’ll be able to filter it out of reports such as your Profit & Loss Statement when you display the report (to do this, select Exclude Year-End Adjustments from the Display Transactions filter when viewing the report).
How do I record a journal entry for last financial year?
If you've closed your financial year but need to record a journal entry for that year, you can roll back the financial year to record that transaction. Once you've recorded the transaction, make sure you close the financial year again.
When wouldn’t I use a general journal entry for adjustments?
If you need to adjust the balance of banking accounts, inventory items, customers or suppliers, there’s a better way to record the adjustments. Here are some common adjustments you might need to make and suggestions for how to record them in AccountRight:
Record an adjustment for each customer using the Sales window (Sales command centre > Enter Sales). Enter negative dollar values in the sales to create credit notes that can be used to close the sales you won’t be receiving payment for. Tell me more
If you’re tracking item quantities and values in AccountRight, go to the Inventory command centre > Inventory Adjustment to make any adjustments. Tell me more. If you’re not tracking inventory, you can record a general journal entry.
Go to the Setup menu > Opening Balances to enter amounts for accounts and items you had on hand when first starting to use AccountRight. Tell me more
|Bank transfers||To record transfers between banking accounts or to petty cash, go to the Banking command centre > Transfer Money. Tell me more|
To record withdrawals, or personal expenses, go to the Banking command centre > Spend Money. Tell me more
|Capital contributions||For cash contributions made by the owners of the business, go to the Banking command centre > Receive Money. Tell me more. For other types of assets, such as a car or furniture, record a general journal entry.|
Can I set up a recurring general journal template?
Yes! This means you won't need to create a general journal entry from scratch each time you need to record it. When you set up a recurring transaction, the transaction information is saved in a separate "holding area" where you can retrieve the transaction as many times as you want. You can change the information on a recurring template as needed. Until you record them, recurring general journal templates have no effect on your financial records.
You can remove a recurring template whether your transactions are changeable or unchangeable. The transaction is removed from your list of recurring templates only. Any transactions you've already recorded using a recurring template won't be affected if you choose to remove that recurring template.
How can I print my journal entries?
While you can't print individual journal entries, you can run the General Journal report for a given date range, then print the report. The General Journal report is found under Reports menu > Index to Reports > Accounts tab > Transaction Journals sub-heading.
Note that this report will always sort journals by date (oldest journals first), regardless of any other Sort criteria you apply.
What does Auto # mean in the General Journal No. field?
The default number shown in the General Journal No. field is the next available number. When you click in the General Journal No. field, Auto # appears to confirm that the number has been automatically selected for you. You can type a different number into the field if you want, but this will not change the numbering for subsequent general journals.