This screen is used to enter new General Journal entries into your database.
What is a general journal entry? It is an accounting entry that is made outside of usual cash sales/receipts or account purchasing or receipts. General journal entries can be used for any kind of entry. This gives them great flexibility and power, but also misuse of these entries may result in your accounts being of little value to yourself and others. If you do not know how to make these entries, then you should seek professional advice.
Main Transaction details
This screen has the following fields:
- Journal number (required): An identification number for this transaction. You can generally let Uwazi generate a number for this field
- Trans date (required): Transaction date, the date that this transaction took place on
- Show inclusive: Are amounts on this screen entered inclusive or exclusive of tax. For example, if an item cost $1,000 plus $100 tax, it would be entered as $1,000 exclusive or $1,100 inclusive of tax
- Trans memo: Transaction memo. A description about what this transaction relates to. Consider keeping notes in this field about the transaction as a whole. Individual line items have their own memos.
Line item details
A general journal entry will also have at least two line items. The example screen shows three. It shows the business purchasing two items of office equipment, paid for by an owner as an owner’s contribution. The first line item relates to the owner’s contribution. The next line item is office desks, The final line item is for office chairs.
Each line item has the following fields:
- Account (required): Which Uwazi database account will record this line item
- Debit: The amount of accounting debit of this line item
- Credit: The amount of accounting credit of this line item. If you enter both a debit and a credit amount, Uwazi accounting will offset between them. Ultimately, an accounting entry can be either a debit or a credit but not both
- Memo: A description about this line item
- Tax: The type of tax that applies to this line item. See below for more details.
- Tax amount: The amount of tax that is applied to this line item. Unless you need to change the amount of tax that is applied, you can let Uwazi accounting automatically calculate this field based on the type of tax that you select at the tax field
More about tax
What type of tax should you use. It depends on whether it is a sales tax or a GST/VAT tax
For sales and use taxes:
- Sales taxes are applied to sales. It would be rare to enter a sale as a general journal entry, but it is possible. If this transaction is a sale, then use a tax code for revenue accounts (eg sales revenue). Sales tax does not apply to other line items like an entry to a bank account. If your customer has an exemption certificate, then use a zero rated tax code
- If you sell something that sales tax does not apply to, e.g. a service, then use a N/A code. This is because sales tax does not apply, or is not applicable, to this kind of sale
- For everything else – including purchases – you should use a N/A code. This tax code specifies that tax is not applicable to this entry
For GST/VAT; these taxes apply to taxable supplies. This includes both supplies that you receive (purchases) and supplies that you make (sales):
- You should use a GST or a VAT code for supplies subject to the tax
- Use a FRE code for supplies that are zero-rated
- Use a N/A code for things that are not supplies. If you are recording a purchase subject to GST, for instance, you would use a GST code on the expense account, but N/A on the bank account used to pay or accounts payable used to record your trade creditor. If the transaction records something internal to your organization, you would generally use a N/A code for all line items. This is because these internal accounting entries do not represent taxable supplies