To carry out journal adjustments the journals must be defined. These are purely to ensure that adjustments balance correctly. They do not appear in any reports.
Posted adjustments appear on transaction reports with JNL at the beginning of the transaction number.
The journals in Retail Business are purely for the purpose of making adjustments to ledger transaction balances. There is no need to set up the "standard" ledger journals such as profit and loss, debtors, creditors, etc. The balances for the above "journals" are calculated on the run. Retail Business is a date-based system and there is no need to bother with opening and closing entries. Unless you make end-of-period adjustments. In that case you may need to reverse a set of adjustments at the beginning of a period. That has the effect of "closing" the ledger.
1. Click New to create a new journal.
2. Enter a unique code. This can be alphabetic (as above) or numeric.
3. Enter a description of the journal.
4. Select the default credit and debit accounts. These appear automatically when creating a new journal adjustment. You don't need to use the defaults as any valid ledger account is acceptable. Providing some simple rules are followed.
For non-accountants. Getting the credit and debit accounts right is important. Generally the rules are:
1. The debit account is the account that has its balance decreased by the adjustment.
2. The credit account has the balance increased by the adjustment.
3. In most cases the account type must be identical. That is, an expense account is decreased in value, and another expense account is increased in value.
4. You don't have to bother with posting to a profit and loss account (Professionals Retail Business doesn't have one). So long as the accounts selected are the correct ones, and the entries balance, the Income Statement, Profit and Loss, Trial Balance and Balance sheet will be correct.
If you wish to account correctly for wages paid in advance: The credit account would be something like "Expense prepaid." This account needs to be set up with G.S.T. and Tax turned off. It is an expense account and the only entries that show in it must be adjustments.
The debit account is the normal Wages and Salaries account. The result of the adjustment will be to decrease your expenses (shown in the profit and loss and trial balance) by the amount of the adjustment.
The total value of adjustments in the Expenses prepaid account is shown on the trial balance as a balance sheet entry, and in the balance sheet as a current asset.