Making Adjusting Entries

The purpose of the General Journal is to allow entries which can not be made through either the Check or Deposit Journals. Examples of such entries may be to record payroll tax accruals, as in the example in , if you keep your books on an accrual basis rather than strictly a cash basis. Another example might be to decrease the value of a prepaid postage account, such as a postage permit, each time a bulk mailing is made and the post office charges your account.

General Journal entries must be in balance before they can be posted. In accounting terms this means that the debits must equal credits. To enter a credit amount enter a minus sign in the first position. To enter a debit make the amount a positive number - do not use a minus sign.

If you are not familiar with when to use a debit or credit the BasicBooks General Ledger simplifies the process of making the entry by giving you an on-screen tip on when to use a positive amount or a negative amount. All you need to know is whether you are increasing or decreasing the balance of the general ledger account. See the section, Money Entry Tip, for instructions on how to do this.

General Journal entries are limited to 50 in a batch before the batch must be posted. To make a General Journal entry select;

• General Journal -> Create or Edit New General Journal Entries

Figure: General Journal Entry Window

• Adjustment Entry Date - Enter a valid date or click the Calendar box to select a date. After the first Line Item the date field will be automatically set to the same date as the last entry. To change a date you may either enter a different date or click the Calender button to select the date. (Don't forget to change the date in the entry window when the date of the next entry is different than the last entry. If you do forget you can select the Line Item in the bottom window by clicking on it and then correct the date.)
• Adjust Ledger Account - Enter the general ledger account number to be updated for this Line Item. The amount on this line will be used to update the balance of the account number you enter.
• Adjustment Description (Comments) - You may enter whatever is appropriate to explaining this entry.
• Amount of Increase or Decrease - This is the amount of the entry for this account number. Enter a credit with by placing a minus sign in the first position. To enter a debit make the amount a positive number. See the section on Money Entry Tip for how to make the entry if you are not sure if it is a debit or credit.
• After entering the data click the OK button to transfer the entry line to the window below.
• Fiscal Period - By scrolling the Line Item window to the right the Fiscal Period will become visible. This is number of the fiscal year month in the general ledger that will be updated with the amount of this Line Item. The number is determined by the month used in the entry date field.
• Balance - Each Line Item entry causes the Balance column, at the far right of the window, to be updated. The Balance must be equal to zero before the entries can be posted. To create a zero balance your debits (positive amounts) must equal the credits (negative amounts).