journals

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:23AM in AAT student discussion
does any one have any tips on when you need to do a journal <BR>what is the credit and what is the debit <BR>is there a way you can remember it

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals

    A journal is usually done if you have misposted an item. For example if you posted a payment for electricity into repairs, then you would debit electricity and credit repairs. This also applies if you have items in suspense waititng to be identified. Once you'd done that you would either debit or credit suspense to clear it and debit or credit the correct account. Hope this isn't too confusing! Shout again if you need any help<BR><BR>Wendy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals

    yeah i agree with the above, i just reverse the erroroneous transaction and do the correct transaction, in the journal you would just write what you did <BR><BR>eg debit creditor, credit bank
  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals

    Hi<BR><BR>It depends what the journal is for most times they are done to reverse entries if mistakes have been made, you would do a journal the opposite way to the original entry, but if you are posting amounts from the P & L directly into the balance sheet this is easier if a journal entry is made. if you credit the P & L you always debit the balance sheet and vice versa.<BR><BR>Hope this makes sense<BR>If it doesn't give me a shout<BR><BR><BR>Reena
  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals

    if you had to prepare the following two journals which account would you credit and debit<BR><BR>The first one is that a cheque has been logged into the cash book at an amount of £3,216.99 but in fact it was for £3,126.99. The wrong amount has been posted to the purchases ledger control account.<BR><BR>The second one is a customer owes us £1,2337 but have gone into liquidation so we have no chance of recovering the debt. later on we may be able to recover the VAT included in this amount, but for the moment please write off the whole balance and ignore VAT<BR><BR>Both of these matters should be dealt with by means of journals, how would you do this, any help would be appreciated<BR><BR>Thanks
  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals

    The two journal entries are: -<BR>Debit Cash book 90.00<BR>Credit Purchases Ledger control account 90.00<BR>Narrative: To correct cheque no. ... - wrong amount entered into accounts<BR><BR>Debit Bad debts account 1233.70<BR>Credit Sales Ledger control account 1233.70<BR>Narrative: To write off bad debt of customer ... who has gone into liquidation<BR><BR>Hope this helps<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    journals - T accounts

    To understand Journals you need to be able to draw up the T accounts, if you can write up what has happened, you then add (preferably in another colour) what needs to happen. <BR><BR>Then you simply use the information that you have written in the different colour and write it into the Journal.<BR><BR>Remember to always put the Debit first, journals have to add up and the narrative (if needed) is simply why you have written it.<BR><BR>Hope this helps<BR><BR>Jo

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