Forum Discussion

Ianinfinance's avatar
Ianinfinance
Experienced Cover User
3 years ago

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 - perfec...
  • Mike_James's avatar
    Mike_James
    3 years ago

    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.