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      How are common transactions recorded as Journal Entries?

      Common activities in FreshBooks like sending an Invoice, logging an Expense, or doing Bank Reconciliation, are all recorded in FreshBooks as Journal Entries that are automatically posted to your Chart of Accounts and your General Ledger Report. The General Ledger Report can be used to review Journal Entries, and below is a list of how all common treatments are recorded as Journal Entries in FreshBooks.

       

       

      Review Journal Entries

      When reviewing Journal Entries, we recommend using the General Ledger Report. This is because Journal Entries are recorded differently when compared between the Chart of Accounts and the General Ledger Report:

      Chart of Accounts General Ledger Report
      • Displays all Journal Entries, including original entries, reversal entries and the updated entry created when a transaction has been edited
      • Each entry has its own line
      • Amounts are either positive (xx.xx) or negative (-xx.xx) based on the natural debit or credit balance of the account and whether the account balance is increasing or decreasing
      Only displays the most updated Journal Entry affecting that account

      An Invoice is edited once, resulting in three entries in both the Accounts Receivable and Sales Accounts:

      ChartOfAccountsAR.png

      ChartOfAccountsSales.png

      1. First the original entry is listed ($10.00 CAD)
      2. Followed by the reversal entry (-$10.00 CAD)
      3. Then finally with the updated entry ($12.00 CAD).

      An invoice is edited once, resulting in one entry each in the Accounts Receivable and Sales Accounts:

       GeneralLedgerEntries.png

      An entry for the updated amount is listed ($12.00 CAD)

       

      Petty Cash Account

      Note that Petty Cash is treated as a clearing account:

      • All transactions are initially recorded in the Petty Cash Account (Payments received, Other Income entries deposited and Expenses paid out)
      • The process of completing Bank Reconciliation (Bank Rec) will move transactions out of the Petty Cash Account into the connected Bank or Credit Card Account that you are reconciling
      • Your Accountant can also reassign any transaction entered to other Accounts in the CoA with Journal Entries

       

      Common Treatments

      Each common treatment is written in the format of how they appear on the General Ledger Report:

       

      Bank Reconciliation

      Opening Balances

       

      Bank/Credit Card Accounts are automatically created in the Chart of Accounts when you first enter an Opening Balance in Bank Rec. Each connected bank/credit card will have its own Bank/Credit Card Account. When an Opening Balance is entered in Bank Rec, the Opening Balance Adjustments Account is automatically created in the Chart of Accounts.

       

      An Opening Balance of $10 is entered for a Bank Account:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Bank Account (1000 - #)  Initial Balance / Initial Balance Jan 1, 2020 10.00 -
      Opening Balance  Opening Balance Adjustments (3001 - 4) Initial Balance / Initial Balance Jan 1, 2020 - 10.00

       

      An Opening Balance is reset for a Bank Account (from $10 to $12). The original Opening Balance entry is updated in the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Bank Account (1000 - #)  Initial Balance / Initial Balance Jan 1, 2020 12.00 -
      Opening Balance  Opening Balance Adjustments (3001 - 4) Initial Balance / Initial Balance Jan 1, 2020 - 12.00

       

      An Opening Balance of $10 is entered for a Credit Card Account:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Opening Balance Opening Balance Adjustments (3001 - 4) Initial Balance / Initial Balance Jan 1, 2020 10.00 -
      Credit Cards Credit Card Account (2004 - #) Initial Balance / Initial Balance Jan 1, 2020 - 10.00

       

      An Opening Balance is reset for a Credit Card Account ($10 to $12). The original entry is updated for the new Opening Balance entered:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Opening Balance Opening Balance Adjustments (3001 - 4) Initial Balance / Initial Balance Jan 1, 2020 12.00 -
      Credit Cards Credit Card Account (2004 - #) Initial Balance / Initial Balance Jan 1, 2020 - 12.00

       


       

      Unreconciled Transactions in Bank Rec

      Money Inflow 

      A Money Inflow transaction (positive amount) is imported in Bank Rec. It appears as unreconciled on the left side in Bank Rec and no entries are created upon import.

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      Money Outflow

      A Money Outflow transaction (negative amount) is imported in Bank Rec. It appears as unreconciled on the left side in Bank Rec. An Expense entry is automatically created via Bank Connections:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses Travel* (6000 - #) Expense / Expense  Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      *Travel is an Expense Category/Account assigned to the Expense.
       



      Reconciled Transactions in Bank Rec - Money Inflow

      Note: After a transaction is matched or marked in Bank Rec, the entry will be reflected in the Bank Account or Credit Card Account instead of Petty Cash.

       

      Expense Refund

      A Money Inflow transaction of $10 is Marked as an Expense Refund in Bank Rec. The amount is recognized in the Expense Category / Account selected on the refund in Bank Rec:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Expense Refund / Expense Refund Jan 1, 2020 10.00 -
      Operating Expenses or Cost of Goods Sold Travel* (6000 - #) or Travel* (5000 - #) Expense Refund / Expense Refund Jan 1, 2020 - 10.00

      *Travel is an Expense Category/Account assigned to the Expense.

       

      Other Income

      A Money Inflow transaction of $10 on the left is matched to a Jan 1, 2020 Other Income entry on the right in Bank Rec:
       

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Other Income / Other Income Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Other Income / Other Income Jan 1, 2020 - 10.00

       

      Owner’s Equity - Contribution

      A Money Inflow transaction of $10 is Marked as Owner's Equity in Bank Rec for an Owner’s Equity Contribution. The amount is cleared out of Petty Cash and recognized in Owner’s Equity:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Owner's Equity / Owner's Equity Jan 1, 2020 10.00 -
      Owner's Equity Owner's Equity (3000 - #) Owner's Equity / Owner's Equity Jan 1, 2020 - 10.00

       

      Payment

      A Money Inflow transaction of $10 on the left is matched to a Jan 1, 2020 Payment applied on an Invoice on the right in Bank Rec:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Payment / Invoice 000001 Jan 1, 2020 10.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020 - 10.00

       

      Transfer - Inflow

      A Money Inflow transaction of $10 is Marked as a Transfer in Bank Rec. The amount is cleared out of Petty Cash and recognized in the Bank / Credit Card Account:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Bank Transfer / Bank Transfer Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Bank Transfer / Bank Transfer Jan 1, 2020 - 10.00

       



      Reconciled Transactions in Bank Rec - Money Outflow

      All Money Outflow transactions automatically create Expense entries that can be found in both the Expenses section and on the FreshBooks Entries (right side) of Unmatched in Bank Rec.

       

      Expenses

      An Expense is matched in Bank Rec. Matched Expenses will be reflected in the Bank or Credit Card Account instead of Petty Cash:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses Travel* (6000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Expense / Expense Jan 1, 2020 - 10.00

      *Travel is an Expense Category/Account assigned to the Expense.

       

      Owner’s Equity - Draw

      A Money Outflow transaction is Marked as Owner's Equity in Bank Rec for an Owner’s Equity Draw. This sometimes includes personal expenses processed in a business account. The original Expense entry created via Bank Connections is automatically deleted.

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Owner's Equity Owner's Equity (3000 - #) Owner's Equity / Owner's Equity Jan 1, 2020 10.00 -
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Owner's Equity / Owner's Equity Jan 1, 2020 - 10.00

       

      Transfer - Outflow

      A Money Outflow transaction of $10 is Marked as a Transfer in Bank Rec. The original expense entry created via Bank Connections is automatically deleted. The amount is cleared out of Petty Cash and recognized in the Bank / Credit Card Account:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Bank Transfer / Bank Transfer Jan 1, 2020 10.00 -
      Cash or Credit Cards Bank Account (1000 - #) / Credit Card Account (2004 - #) Bank Transfer / Bank Transfer Jan 1, 2020 - 10.00

       


       

      Expenses

      An Expense is created. This Expense is categorized under Travel and is not marked as Cost of Goods Sold (COGS):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses Travel* (6000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      *The Account is Travel, and the Parent Account is Operating Expenses.

       

      An Expense is created. This Expense is categorized under Travel and is marked as Cost of Goods Sold (COGS). The entry is the same for Expenses whether they’re marked as billable or non-billable:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cost of Goods Sold Travel* (5000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      *The Account is Travel, and the Parent Account is Costs of Goods Sold.

       

      An Expense is created with Sales Tax applied. This Expense is categorized under Travel and is not marked as Cost of Goods Sold (COGS):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses Travel* (6000 - #) Expense / Expense Jan 1, 2020 9.00 -
      Taxes Paid Sales Tax* (6001 - #) Expense / Expense Jan 1, 2020 1.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      *The Taxes Paid account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to an Expense.

       

      An Expense categorized as Travel is imported via a Bank Connection from a bank account or a credit card:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses Travel* (6000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      Even though this Expense has been imported through a Bank Connection, it will flow through Petty Cash until it is matched in Bank Rec. To see the result of matching this transaction in Bank Rec, refer to the Reconciled Transactions in Bank Rec - Money Outflow section.

       


      Invoices

      An Invoice is sent for a billed service or item sale:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 10.00

       

      A billed Invoice has an amount updated (e.g., from $10 to $12). The original entry is updated in the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 12.00 -
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 12.00

       

      A billed Invoice is deleted. No entry; the original entry is deleted from the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      A billed Invoice with Sales Tax applied on its line items is created:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Taxes Payable Sales Tax* (2001 - #) Invoice / Invoice 000001 Jan 1, 2020 - 1.00 
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 9.00

      *The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.

       

      Billed Expenses

      An Invoice is created to re-bill an Expense to a Client, with no markup. Before the Invoice is created, an entry is created for the re-billed Expense when the expense is entered and marked as billable.

      Expenses that are marked as billable are also automatically marked as Cost of Goods Sold (COGS). You can also un-mark them as COGS in your advanced Expense settings.

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses or Cost of Goods Sold Travel* (6000 - #) or Travel* (5000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      *Travel is an Expense Category/Account assigned to the Expense.


      The Billed Expenses entry, with no markup, is created when the Invoice is sent to the Client:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 3, 2020 10.00 -
      Revenue Billed Expenses (4000 - #) Invoice / Invoice 000001 Jan 3, 2020 - 10.00

       



      An Invoice is created to re-bill an Expense to a Client, with a $1 markup. Before the Invoice is created, an entry is created for the re-billed Expense when the expense is entered and marked as billable.

      Expenses that are marked as billable are also automatically marked as Cost of Goods Sold (COGS). You can also un-mark them as COGS in your advanced Expense settings.

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Operating Expenses or Cost of Goods Sold Travel* (6000 - #) or Travel* (5000 - #) Expense / Expense Jan 1, 2020 10.00 -
      Cash Petty Cash (1000 - #) Expense / Expense Jan 1, 2020 - 10.00

      The Billed Expenses entry, with a $1 markup, is created when the Invoice is sent to the Client:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 3, 2020 11.00 -
      Revenue Billed Expenses (4000 - #) Invoice / Invoice 000001 Jan 3, 2020 - 11.00

       

      Deposits

      Note: For Reports run on Billed/Accrual, because deposit payments are made to you prior to the delivery of goods or services, they are not initially recorded as income. Once your client has made a payment toward the remaining balance of the invoice, all payments received will be recorded as income.

       

      An Invoice is sent with a Deposit requested on Jan 1, 2020 (Deposit is $3, Invoice total is $10):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Unearned Revenue Unearned Revenue (2002 - #) Invoice / Invoice 000001 Jan 1, 2020 - 10.00

      A Payment of $3 for the full Deposit amount is added onto an Invoice with a Deposit requested on the same date Jan 1, 2020:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 1, 2020 3.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020 - 3.00

      Then on Jan 2, 2020, any amount (e.g. $1) above the Deposit is paid subsequently on an Invoice with a Deposit requested:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 2, 2020 1.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 2, 2020 - 1.00

       The full amount of the Invoice is now recognized as income:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Unearned Revenue Unearned Revenue (2002 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 10.00

        

      Drafts 

      A draft Invoice is created and saved. No entry is made for Invoices with a draft status:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      A draft Invoice is partially paid (e.g., $5 payment on a $10 invoice). When the partial Payment is added onto the draft Invoice, both the Invoice and the Payment are recorded:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 10.00

       

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 1, 2020 5.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020 - 5.00

       

      Payment Schedules

      An Invoice is sent for a billed service or item sale with a Payment Schedule applied. The full amount of income is recognized when the Invoice is sent:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Accounts Receivable Accounts Receivable (1200 - #) Invoice / Invoice 000001 Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Invoice / Invoice 000001 Jan 1, 2020 - 10.00

       

      Retainers

      A Retainer is created and saved. No entry is made for Retainers.

      Note: A Journal Entry is recorded once the Invoice is generated from the Retainer.

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       


      Payments

      A full Payment is added on Jan 1, 2020 onto a $10 Invoice:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 1, 2020 10.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020 - 10.00

       

      A Payment has an amount updated from $10 to $8 on Jan 2, 2020. Only the updated transaction can be viewed in the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 2, 2020 8.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 2, 2020 - 8.00

       

      A Payment is deleted. The original entry is deleted from the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust your range.

       

      Credit Notes

      A Credit Note is created (either saved or sent):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Revenue Sales (4000 - #) Credit Note 000001 Jan 1, 2020 10.00 -
      Customer Credit Customer Credit (2003 - #) Credit Note 000001 Jan 1, 2020 - 10.00

       

      Credit Note with Sales Tax applied on its line items is created (either saved or sent):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Revenue Sales (4000 - #) Credit Note 000001 Jan 1, 2020 9.00 -
      Taxes Payable Sales Tax* (2001 - #) Credit Note 000001 Jan 1, 2020 1.00 
      Customer Credit Customer Credit (2003 - #) Credit Note 000001 Jan 1, 2020 - 10.00

      *The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.

       

      Credit Note is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      Credit Note is applied to an Invoice:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Customer Credit Customer Credit (2003 - #) Payment / Invoice 000001 Jan 1, 2020 10.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020  - 10.00 

       

      Overpayment Credits

      A $10 Overpayment Credit is created from a Payment entered over the amount on an Invoice (e.g. $110 entered for a $100 Invoice):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Payment / Invoice 000001 Jan 1, 2020 100.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020  - 100.00 

       

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Credit / Overpayment Credit 000001 Jan 1, 2020 / Overpayment: Invoice 000001 10.00 -
      Customer Credit Customer Credit (2003 - #) Credit / Overpayment Credit 000001 Jan 1, 2020 / Overpayment: Invoice 000001 - 10.00 

       

      An Overpayment Credit is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      An Overpayment Credit is applied to an Invoice:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Customer Credit Customer Credit (2003 - #) Payment / Invoice 000001 Jan 1, 2020 10.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020  - 10.00 

       

      Prepayment Credits

      A Prepayment Credit is created (either saved or sent):

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Credit / Prepayment Credit 000001 Jan 1, 2020 10.00 -
      Customer Credit Customer Credit (2003 - #) Credit / Prepayment Credit 000001 Jan 1, 2020 - 10.00 

       

      Prepayment Credit is deleted from the Client Profile. The original entry is deleted from the General Ledger Report:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      No active accounts found. Please adjust the range.

       

      Prepayment Credit is applied to an Invoice:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Customer Credit Customer Credit (2003 - #) Payment / Invoice 000001 Jan 1, 2020 10.00 -
      Accounts Receivable Accounts Receivable (1200 - #) Payment / Invoice 000001 Jan 1, 2020  - 10.00 

       

      Other Income

      An Other Income entry is created:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Other Income / Other Income Jan 1, 2020 10.00 -
      Revenue Sales (4000 - #) Other Income / Other Income Jan 1, 2020 - 10.00

       

      An Other Income entry with Sales Tax is created:

      Parent Account Account Transaction / Reference Date / Client / Note Debit Credit
      Cash Petty Cash (1000 - #) Other Income / Other Income Jan 1, 2020 10.00 -
      Taxes Payable Sales Tax* (2001 - #) Other Income / Other Income Jan 1, 2020 - 1.00 
      Revenue Sales (4000 - #) Other Income / Other Income Jan 1, 2020 - 9.00

      *The Taxes Payable account appears as the Sales Tax name assigned to the created tax rate. A Taxes Paid account will also be automatically created in your Chart of Accounts the first time the tax rate is applied to a billed service, item sale or Other Income entry.

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