Journal Entry Types

Let's take a look at some of the common accounting entries that can be done via Journal Entry in ASAERP.

Journal Entry

This is a general purpose entry type which can be used for different purposes. Let's see a few examples.

Expenses (non accruing)

Many times it may not be necessary to accrue an expense, but it can be directly booked against an expense Account on payment. For example, a travel allowance or a telephone bill. You can directly debit Telephone Expense (instead of your telephone company) and credit your Bank on payment.

Debit: Expense Account (like Telephone expense).
Credit: Bank or Cash Account.

Crediting Salaries

For crediting employee salaries, 'Journal Entry' type is used. In this case,

Debit: The salary components.
Credit: The bank account.

Inter Company Journal Entry

If a transaction occurs between a parent and child company, or sister companies, or two companies belonging to the same group, this option can be used to make an Inter Company Journal Entry.

Bank Entry

Use this type when making or receiving a payment using a Bank Account. For example, paying for an entertainment charges etc using the Company's bank account.

Cash Entry

This is the same as 'Bank Entry' but the payment is made via a Cash Account.

Credit Card Entry

This is a type of entry to easily identify all credit card entries.

Debit Note

This is a document sent by a customer (your Company) to a supplier (your Supplier) when returning goods/items.

You can also create a Debit Note directly from a Purchase Invoice.

"Debit Note" is made for a Supplier against a Purchase Invoice or accepted as a credit note from Supplier when a company returns goods. When a Debit Note is made, the Company can either receive a payment from the Supplier or adjust the amount in another invoice.

Debit: Supplier Account.
Credit: Purchase Return Account.

Credit Note

This is a document sent by a supplier to a customer when returning goods/items.

"Credit Note" is made for a Customer against a Sales Invoice when the company needs to adjust a payment for returned goods. When a Credit Note is made, the seller can either make a payment to the customer or adjust the amount in another invoice.

Debit: Sales Return Account.
Credit: Customer Ac

A debit/credit note is usually issued for the value of the goods returned or lesser.

Contra Entry

A Contra Entry is booked when the transaction is booked within the same Company of types:

Cash to Cash
Bank to Bank
Cash to Bank
Bank to Cash

This is used to record withdrawing or depositing money from a Bank Account. When this entry is used, the money does not leave the company unless it is again used to pay for something.

Excise Entry

When a Company buys goods from a Supplier, company pays excise duty on these goods to Supplier. And when a company sells these goods to Customers, it receives excise duty. Company will deduct payable excise duty and deposit balance in Govt. account.

When a Company buys goods with Excise duty:

Debit: Purchase Account, Excise Duty Account.
Credit: Supplier Account.

When a Company sells goods with Excise duty:

Debit: Customer Account.
Credit: Sales Account, Excise Duty Account.

Note: Applicable in India, might not be applicable for your country. Please check your country regulations.

Write Offs or Bad Debts

If you are writing off an Invoice as a bad debt, you can create a Journal Voucher similar to a Payment, except instead of debiting your Bank, you can debit an Expense Account called Bad Debts.

Debit: Bad Debts Written Off
Credit: Customer

Note: There may be regulations in your country before you can write off bad debts.

Opening Entry

This entry is useful when moving from another software to ASAERP during any time of the year. Your outstanding bills, equities etc. can be recorded to ASAERP using this entry type. Selecting type will fetch the Balance Sheet accounts.

Depreciation

Depreciation is when you write off certain value of your assets as an expense. For example if you have a computer that you will use for say 5 years, you can distribute its expense over the period and pass a Journal Entry at the end of each year reducing its value by a certain percentage.

Debit: Depreciation (Expense).
Credit: Asset (the Account under which you had booked the asset to be depreciated).

Note: There may be regulations in your country that define by how much amount you can depreciate a class of Assets.

Exchange Rate Revaluation

If your Chart of Accounts has accounts with multiple currencies, a Journal Entry of type 'Exchange Rate Revaluation' helps in dealing with this situation. This entry is intended to be created from an Exchange Rate Revaluation form.