Ledger Transaction Tutorials

• Bad Debts
• Depreciation
• Discount Allowed
• Discount Received
• Foreign Exchange Payments
• Foreign Exchange Receipts
• Hire Purchase Agreements
• Local Forex Gains or Losses for non-local accounts
• Payroll Transactions
• Periodic Journal Entries (Inventory Movements)

💡These tutorials explain how to record bad debts, depreciation, discounts, foreign exchange, loans, payroll and periodic inventory journals.

How to Record a Bad Debt#

1. Navigate to a Customer Journal.
2. Click New (button).
3. Customer = Select the applicable customer.
4. Items = Click Custom (button) next to Add.
5. On the entry that was created, fill in the details as follows:
   1. Description = Balance written off.
   2. Dr Account = Bad Debts.
   3. Cr Account = Customer’s Account.
   4. VAT Category = Input +.
      • Note: If the customer’s outstanding balance does not include VAT, set VAT Category = N/A.
   5. VAT Type = Bad Debts.
      • Note: Certain countries (e.g. South Africa) require bad debts to be shown on the VAT return separately from other input claims. If your country does not require that, you do not need to create a VAT Type for bad debts; you can use the standard-rated VAT type.
   6. Inc = Checked.
   7. Amount = Enter the amount you are writing off, as shown on the customer’s account.
   8. Click Allocation (button).
      1. On the allocation popup, click the invoices that are being written off.
      2. Click Allocate (button).
      3. Change the amount of the allocation to the amount being written off (if necessary).
      4. Close the allocation popup.
6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Monthly Depreciation#

1. Navigate to the Depreciation Journal.
2. Click New (button).
3. Date = Last day of the applicable month (e.g. 30 June).
4. Click Actions (button) > Depreciation > Add Depreciable Assets.
5. Click Yes (button) on the message “Insert Depreciation items for all active Assets with a monthly cost?” to confirm.
   • Note: A custom entry is added for each active depreciable asset with a Book Value greater than its Residual Value. The Dr Account (Depreciation) and Cr Account (Accumulated Depreciation) come from the Transaction Type’s default accounts. The Status in each asset’s Depreciation attribute set is updated: Active for assets being depreciated and Complete for fully depreciated assets. The asset’s own status is not changed.
6. Check the items.
7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Discount Allowed#

1. Navigate to the Customer Journal.
2. Click New (button).
3. Customer = Select the applicable customer.
4. Items = Click Custom (button) next to Add.
5. On the entry that was created, fill in the details as follows:
   1. Description = Discount Allowed.
   2. Dr Account = Discount Allowed.
   3. Cr Account = Customer’s Account.
   4. VAT Category = Input +.
      • Note: If the customer’s outstanding balance does not include VAT, set VAT Category = N/A (e.g. if you charged the customer interest and you are writing off that interest). Input + applies to the expense account Discount Allowed. If you are debiting a sales account instead of an expense account, the VAT Category is Output – because it reduces your revenue.
   5. VAT Type = Standard VAT.
   6. Inc = Checked.
   7. Amount = Enter the amount as per the customer’s account that you are writing off as a discount.
   8. Click Allocation (button).
      1. On the allocation popup, click the invoices that are being discounted.
      2. Click Allocate (button).
      3. Change the amount of the allocation to the amount being discounted (if necessary).
      4. Close the allocation popup.
6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Discount Received#

1. Navigate to the Supplier Journal.
2. Click New (button).
3. Supplier = Select the applicable supplier.
4. Items = Click Custom (button) next to Add.
5. On the entry that was created, fill in the details as follows:
   1. Description = Discount Received.
   2. Dr Account = Supplier’s Account.
   3. Cr Account = Discount Received.
   4. VAT Category = Output +.
      • Note: If the supplier’s outstanding balance does not include VAT, set VAT Category = N/A (e.g. if the supplier is not registered for VAT).
   5. VAT Type = Standard VAT.
   6. Inc = Checked.
   7. Amount = Enter the amount as per the supplier’s account that you are writing off as a discount.
   8. Click Allocation (button).
      1. On the allocation popup, click the invoices that are being discounted.
      2. Click Allocate (button).
      3. Change the amount of the allocation to the amount being discounted (if necessary).
      4. Close the allocation popup.
6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Foreign Exchange Payments#

1. Create a current liability account named Forex Control (if the account does not exist on your chart of accounts).
2. Create an expense account named Forex Gains or Losses (if the account does not exist on your chart of accounts).
3. Navigate to the Supplier Journal.
   1. Click New (button).
   2. Date = The date of the payment.
   3. Supplier = Select the applicable supplier.
   4. Items = Click Custom (button) next to Add.
   5. On the entry that was created, fill in the details as follows:
      1. Description = Forex Payment.
      2. Dr Account = Supplier Account.
      3. Cr Account = Forex Control.
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
      6. Inc = Checked.
      7. Amount = Enter the amount paid to the supplier in the foreign currency.
   6. Click Allocation (button).
      1. On the allocation popup, click the invoices that were paid.
      2. Click Allocate (button).
      3. Change the amount of the allocation to the amount paid (if necessary).
      4. Close the allocation popup.
   7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
4. Navigate to Bank Payments – General.
   1. Click New (button).
   2. Date = The date of the payment.
   3. Reference = Enter a reference (e.g. Payment).
   4. Items = Click Custom (button) next to Add.
   5. On the entry that was created, fill in the details as follows:
      1. Description = Forex Payment.
      2. Dr Account = Forex Control.
      3. Cr Account = Bank.
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
      6. Inc = Checked.
      7. Amount = Enter the amount that was deducted from your bank account for the forex payment.
   6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
5. Navigate to the Ledger.
   1. Click Detailed Ledger (radio button).
   2. Select Forex Control from the dropdown list directly below Detailed Ledger (radio button).
   3. Select the Date (e.g. This Month).
   4. Click View (button).
   5. Write down the balance on the account and whether it is a debit or credit balance.
6. Navigate to the General Journal.
   1. Click New (button).
   2. Date = Today’s date.
   3. If there was a debit balance on the Forex Control account, follow this procedure:
      1. Reference = Forex Loss.
      2. Items = Click Custom (button) next to Add.
      3. On the entry that was created, fill in the details as follows:
         1. Description = Forex Loss.
         2. Dr Account = Forex Gains or Losses (Expense Account).
         3. Cr Account = Forex Control.
            • Note: The account had a debit balance; therefore, it is credited to bring the balance to zero.
         4. VAT Category = N/A.
         5. VAT Type = No VAT.
         6. Inc = Checked.
         7. Amount = Enter the balance that was on the Forex Control account.
   4. If there was a credit balance on the Forex Control account, follow this procedure:
      1. Reference = Forex Gain.
      2. Items = Click Custom (button) next to Add.
      3. On the entry that was created, fill in the details as follows:
         1. Description = Forex Gain.
         2. Dr Account = Forex Control.
            • Note: The account had a credit balance; therefore, it is debited to bring the balance to zero.
         3. Cr Account = Forex Gains or Losses (Expense Account).
         4. VAT Category = N/A.
         5. VAT Type = No VAT.
         6. Inc = Checked.
         7. Amount = Enter the balance that was on the Forex Control account.
   5. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
7. Navigate to the Ledger.
   1. Click Detailed Ledger (radio button).
   2. Select Forex Control from the dropdown list directly below Detailed Ledger (radio button).
   3. Select the Date (e.g. This Month).
   4. Click View (button).
   5. The balance on the account should be zero.

How to Record Foreign Exchange Receipts#

1. Create a current liability account named Forex Control (if the account does not exist on your chart of accounts).
2. Create an expense account named Forex Gains or Losses (if the account does not exist on your chart of accounts).
3. Navigate to a Customer Journal.
   1. Click New (button).
   2. Date = The date of the payment.
   3. Customer = Select the applicable customer.
   4. Items = Click Custom (button) next to Add.
   5. On the entry that was created, fill in the details as follows:
      1. Description = Forex Payment.
      2. Dr Account = Forex Control.
      3. Cr Account = Customer Account.
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
      6. Inc = Checked.
      7. Amount = Enter the amount that the customer has paid in the foreign currency.
   6. Click Allocation (button).
      1. On the allocation popup, click the invoices that were paid and for which the discount must be captured.
      2. Click Allocate (button).
      3. Change the amount of the allocation to the discount amount (if necessary).
      4. Close the allocation popup.
   7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
4. Navigate to Bank Receipts – General.
   1. Click New (button).
   2. Date = The date of the payment.
   3. Reference = Customer Payment.
   4. Items = Click Custom (button) next to Add.
   5. On the entry that was created, fill in the details as follows:
      1. Description = Forex Payment.
      2. Dr Account = Bank.
      3. Cr Account = Forex Control.
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
      6. Inc = Checked.
      7. Amount = Enter the amount that was received in your bank account (the converted amount).
   6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
5. Navigate to the Ledger.
   1. Click Detailed Ledger (radio button).
   2. Select Forex Control from the dropdown list directly below Detailed Ledger (radio button).
   3. Select the Date (e.g. This Month).
   4. Click View (button).
   5. Write down the balance on the account and whether it is a debit or credit balance.
6. Navigate to the General Journal.
   1. Click New (button).
   2. Date = Today’s date.
   3. If there was a debit balance on the Forex Control account, follow this procedure:
      1. Reference = Forex Loss.
      2. Items = Click Custom (button) next to Add.
      3. On the entry that was created, fill in the details as follows:
         1. Description = Forex Loss.
         2. Dr Account = Forex Gains or Losses (Expense Account).
         3. Cr Account = Forex Control.
            • Note: The account had a debit balance; therefore, it is credited to bring the balance to zero.
         4. VAT Category = N/A.
         5. VAT Type = No VAT.
         6. Inc = Checked.
         7. Amount = Enter the balance that was on the Forex Control account.
   4. If there was a credit balance on the Forex Control account, follow this procedure:
      1. Reference = Forex Gain.
      2. Items = Click Custom (button) next to Add.
      3. On the entry that was created, fill in the details as follows:
         1. Description = Forex Gain.
         2. Dr Account = Forex Control.
            • Note: The account had a credit balance; therefore, it is debited to bring the balance to zero.
         3. Cr Account = Forex Gains or Losses (Expense Account).
         4. VAT Category = N/A.
         5. VAT Type = No VAT.
         6. Inc = Checked.
         7. Amount = Enter the balance that was on the Forex Control account.
   5. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
7. Navigate to the Ledger.
   1. Click Detailed Ledger (radio button).
   2. Select Forex Control from the dropdown list directly below Detailed Ledger (radio button).
   3. Select the Date (e.g. This Month).
   4. Click View (button).
   5. The balance on the account should be zero.

How to Record a Loan or Hire Purchase Agreement#

1. Navigate to the General Journal.
   1. Click New (button).
   2. Items = Click Custom (button) next to Add.
   3. On the entry that was created, fill in the details as follows:
      1. Description = Truck Purchased: Hyundai Motors.
      2. Dr Account = Motor Vehicles @ Cost (fixed asset account).
      3. Cr Account = Hire Purchase: Motor Vehicles (long-term liability).
      4. VAT Category = Input +.
      5. VAT Type = Capital Goods.
         • Note: In certain countries (e.g. South Africa), the VAT claimed for purchases of capital goods must be shown separately on the VAT return. If your country does not require that, you do not need to create a VAT Type for capital goods; you can use the VAT type for your standard rate.
      6. Inc = Checked.
      7. Amount = Enter the VAT-inclusive purchase amount.
   4. Items = Click Custom (button) next to Add.
      1. Description = Truck Purchased: Hyundai Motors.
      2. Dr Account = Deferred Finance Charges (current asset account).
      3. Cr Account = Hire Purchase: Motor Vehicles (long-term liability).
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
      6. Inc = Checked / Unchecked (it makes no difference because there is no VAT).
      7. Amount = Enter the amount of finance charges that are due over the life of the agreement.
   5. Items = Click Custom (button) next to Add.
      1. Description = Truck Purchased: Hyundai Motors.
      2. Dr Account = Bank Charges (expense account).
      3. Cr Account = Hire Purchase: Motor Vehicles (long-term liability).
      4. VAT Category = Input +.
      5. VAT Type = Standard.
      6. Inc = Checked.
      7. Amount = Enter the VAT-inclusive amount of charges (e.g. loan agreement fee / contract fee) on the agreement.
   6. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).
2. Navigate to Bank Payments.
   1. Click New (button).
   2. Items = Click Custom (button) next to Add.
   3. On the entry that was created, fill in the details as follows:
      1. Description = Truck Purchased: Hyundai Motors – deposit.
      2. Dr Account = Hire Purchase: Motor Vehicles (long-term liability).
      3. Cr Account = Bank (current asset).
      4. VAT Category = N/A.
      5. VAT Type = No VAT.
         • Note: VAT was already claimed in full on the journal entry.
      6. Inc = Checked.
      7. Amount = Enter the deposit amount as per your bank account.
   4. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Periodic Inventory Journals#

Collect the Information#

1. Find the amount added to Stock on Hand:
   1. Navigate to the Goods Received list view.
   2. Select This month next to Set.
   3. Use the arrows next to This Month to navigate to the previous month if applicable.
   4. Record the VAT-exclusive total of Goods Received for the period (Amount A).
   5. Repeat this step if you have more than one Goods Received Transaction Type.
2. Find the amount taken from Stock on Hand:
   1. Navigate to the Goods Issued list view.
   2. Select This month next to Set.
   3. Use the arrows next to This Month to navigate to the previous month if applicable.
   4. Record the VAT-exclusive total of Goods Issued for the period (Amount B).
3. Find the amount added back to Stock on Hand:
   1. Navigate to the Goods Returned list view.
   2. Select This month next to Set.
   3. Use the arrows next to This Month to navigate to the previous month if applicable.
   4. Record the VAT-exclusive total of Goods Returned for the period (Amount C).

Record the Transactions#

1. Navigate to Periodic Journals.
2. Click New (button).
3. Date = Last day of the applicable month.
4. Reference = Month End Stock Journal.
5. Items = Click Custom (button) next to Add.
6. On the entry that was created, fill in the details as follows:
   1. Description = Month-end Inventory Journal.
   2. Dr Account = Stock on Hand.
   3. Cr Account = Accruals (Purchases and Inventory).
   4. VAT Category = N/A.
   5. VAT Type = No VAT.
   6. Inc = Checked / Unchecked.
   7. Amount = Enter Amount A (80 000 in the table below).
7. Items = Click Custom (button) next to Add.
8. On the entry that was created, fill in the details as follows:
   1. Description = Month-end Inventory Journal.
   2. Dr Account = Cost of Sales.
   3. Cr Account = Stock on Hand.
   4. VAT Category = N/A.
   5. VAT Type = No VAT.
   6. Inc = Checked / Unchecked.
   7. Amount = Enter Amount B (125 000 in the table below).
9. Items = Click Custom (button) next to Add.
10. On the entry that was created, fill in the details as follows:
    1. Description = Month-end Inventory Journal.
    2. Dr Account = Stock on Hand.
    3. Cr Account = Accruals (Purchases and Inventory).
    4. VAT Category = N/A.
    5. VAT Type = No VAT.
    6. Inc = Checked / Unchecked.
    7. Amount = Enter Amount C (10 000 in the table below).
11. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

The Accounts Should Look Like This (using the example amounts)#

How to Record Payroll Journals#

Example Summary#

Journal Entry#

1. Navigate to Payroll Journals.
2. Click New (button).
3. Date = Last day of the applicable month (e.g. 30 June).
4. Reference = Payroll Journal.
5. Items = Click Custom (button) next to Add nine times.
6. Fill in each entry as per the table below.
   • Note: Because no VAT applies to any of the entries, it does not matter whether you check the Inc box.
7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

Bank Payments#

1. Navigate to Bank Payments.
2. Click New (button).
3. Date = Last day of the applicable month (e.g. 30 June).
4. Reference = Payroll.
5. Items = Click Custom (button).
6. Fill in each entry as per the table below.
   • Note: Because no VAT applies to any of the entries, it does not matter whether you check the Inc box.
7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).

How to Record Foreign Exchange Gains or Losses#

Step 1: Create Transaction Types (if they do not already exist)#

1. Create four Transaction Types as follows:
   • Forex Gains – Customers
   • Forex Losses – Customers
   • Forex Gains – Suppliers
   • Forex Losses – Suppliers
2. Add the following settings to each Transaction Type, and set the values as specified:

3. Accept the default Statuses (using the Active status is optional) and check the box in the Accounting column for the Active (optional) and Complete statuses.

   

4. Set user access.
5. Add the Transaction Types to a menu.

Create the Transactions#

1. Open the applicable Transaction Type (e.g. Forex Gains – Customers).
2. Click New (button).
3. Reference = Forex Adjustment.
4. Select the applicable Customer or Supplier in the Dr Account or Cr Account columns, whichever applies.
5. Enter the outstanding amount in the Amount column.
6. Click Allocation (button).
   1. On the allocation popup, click the invoices that are being discounted.
   2. Click Allocate (button).
   3. Change the amount of the allocation to the amount being discounted (if necessary).
   4. Close the allocation popup.
7. Click Done (button) if it is available. Otherwise, change the transaction’s status to complete and click Save (button).