Journal entries are used for transactions that affect your books but do not fit into the standard categories for transactions. For example, you make a mortgage payment for a property. To book it, you create a journal entry. Journal entries must be balanced -- a debit to one account and a credit to another.
In the following procedure, we show how to create and post a journal entry batch.
To add a journal entry batch
Go to Accounting > General Ledger > Journals and click Add New. The Journal Batch screen appears.
Complete the screen.
Total Declared | Enter the total dollar amount of the journal entries you are going to add. |
Items Declared | Enter the number of journal entries you are going to add. |
Description | The default description is the user's email address and the date. Change it if needed. |
Notes | Describe the purpose of the journal entries, or any other identifying information you want to record. |
Note: You can leave the Declared fields blank and complete them later, before you post the batch.
Click Save. The New Journal screen appears.
Complete the screen.
Journal Date | Defaults to today's date. You can change it as needed. |
Reference | You can enter information that will help you identify the JE later. |
Post Month | Defaults to the current operating month. You can change it as needed. |
Book | Select Cash, Accrual, Both (Cash and Accrual), or a custom GL book.
Both is the default value, and we recommend it for most journal entries. When you post to Both, Breeze updates the Cash and Accrual books at the same time. Setting a journal to Both ensures that the accounting is correct.
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Notes | You can enter an explanation of the JE, as needed. |
Reverse Next Month | If selected, Breeze will create a reversing JE the next month. Use this option if you want something recorded in the current period and then backed out the next month. For example, you had your building painted in December and you know that it will be $25,000 but the painter hasn't sent the invoice yet. You can enter a journal for it in December so it is an expense for 2018, and then have Breeze reverse it in January when the bill actually arrives. |
Job Cost | Job Cost functionality is used to track remodels and construction projects. If you select this check box, Breeze adds columns in the detail section for Job and Category. |
Apply to Accounts section | In the detail section, complete at least two lines -- one for a credit and one for a debit. The amounts must match (the journal entry must be balanced). You must also select the same property on both lines. |
Click Save.
Continue adding journal entries until the batch is complete.
After entering the last item, the Journal Batch screen appears.
At this point, you can review the batch. The Declared fields should match the Entered fields.
To post the batch, click Post. When you post the batch, the journal entries hit the General Ledger.
When to Create Journal Entries
Here are some scenarios that require journal entries:
To reclassify income, if it was posted to the wrong account on a receipt.
To adjust a loan balance, to make it equal to the correct ending balance.
To correct inventory history totals that do not match the detailed inventory amounts.
To adjust payroll tax amounts or employee balances.
To enter beginning balances when starting to use the system.
To distribute Retained Earnings totals to different equity accounts.
To enter year-end adjustments needed to correct a balance sheet account.
To move cash balances from one bank account to another.
To transfer the balance of an old, unused G/L account to a new account.
To record a mortgage payment (the example at the beginning of this article).
How to Locate Journal Entries
You can locate Journal Entries by navigating to Accounting > General Ledger > Journals.