The purpose of this knowledge article is to outline the debits and credits made to the general ledger transactions table in Accounting Seed when source transactions are posted. Please note that many accountants will refer to entries made in the transactions table as "Journal Entries". At Accounting Seed we preferred the to use the term "general ledger transactions" in reference to recording debits and credits since the Journal Entry and Journal entry lines are sources of general ledger transactions. Below is a list of all the possible debits and credits that can be made in Accounting Seed by their source object.

 

Service Sale Example: A service is sold for $5,000. The user creates a billing in Accounting Seed and uses "4000-Revenue" as the Revenue GL Account on the billing line and posts the billing. The following debits and credits will be inserted into the transactions table for each billing line with the following conditions:

• Product costing is enabled OR
• Product costing is enabled AND the product field is left blank OR
• Product costing is enabled AND the product is a non-inventoried product OR
• Product costing is enabled AND the product field on the billing line has an inventory type of "raw material."

Debit/Credit	Amount	Source	Example GL Account
Debit	$5,000	AR Control GL Account (Set in Account Settings)	1100-Accounts Receivable
Credit	$5,000	Revenue GL Account (Set on Billing Line)	4000-Revenue

Debit/Credit	Amount	Source	Example GL Account
Debit	$5,000	AR Control GL Account set in Account Settings	1100-Accounts Receivable
Credit	$5,000	Revenue GL Account set on Billing Line	4000-Revenue
Debit	$2,000	Expense GL Account on Product	5000-Cost of Goods Sold
Credit	$2,000	Inventory GL Account on Product	1500-Inventory

 

Kit Sale Example: A product kit is sold for $5,000. The product kit has been setup as a Salesforce product with two product parts: part A and part B. The unit cost of the part A has been set at $1,000. The unit cost of part B has been set at $750. The user creates a billing in Accounting Seed and uses "4000-Revenue" as the Revenue GL Account on the billing line and posts the billing. The following debits and credits will be inserted into the transactions table for each billing line with the following conditions:

Debit/Credit	Amount	Source	Example GL Account
Debit	$5,000	AR Control GL Account set in Account Settings	1100-Accounts Receivable
Credit	$5,000	Revenue GL Account set on Billing Line	4000-Revenue
Debit	$1,000	Expense GL Account on Product Part A	5000-Cost of Goods Sold
Credit	$1,000	Inventory GL Account on Product A	1500-Inventory
Debit	$750	Expense GL Account on Product Part B	5000-Cost of Goods Sold
Credit	$750	Inventory GL Account on Product B	1500-Inventory

 

A user receives $5,000 and posts a cash receipt. The following debits and credits will be inserted into the transactions table upon saving (or Posting) the record:

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$5,000	Default cash account set in accounting settings	1000-Cash
Credit	$5,000	Unapplied Cash GL Account set in accounting settings	1099-Unapplied Cash

A user applies a $5,000 cash receipt to an open billing. Upon saving the application the following debit and credit are inserted into the transactions table:

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$5,000	Unapplied Cash GL Account set in accounting settings	1099-Unapplied Cash
Credit	$5,000	AR Control GL Account set in accounting settings	1100-Accounts Receivable

 

Non-Product Purchase Example: A service is purchased for $5,000. The user creates an account payable in Accounting Seed and uses "5000-Supplies Expense" as the Expense GL Account on the account payable line and posts the account payable. The following debits and credits will be inserted into the transactions table for each account payable line with the following conditions:

• Product costing is disabled OR
• Product costing is enabled and the product field is left blank OR
• Product costing is enabled and the product is a non-inventoried product OR
• Product costing is enabled and the product Inventory Type is "kit" OR "manufactured."

 

If product costing is enabled then the Expense GL Account on the account payable line is disregarded. Instead, a debit is made to the Vouchers Payable GL Account set in accounting settings, and a debit or credit is made to the Inventory Variance account set in GL account settings for the difference between the unit cost and the price paid for the product. The credit is booked to the AP Control GL Account set in accounting settings for the full amount on the account payable line.

 

For this example we will assume the unit cost of the product has been set to $4,500 on the product as well. The difference between the price paid on the product and its unit cost ($5,000-$4,500=$500) will be booked to the inventory variance account set in accounting settings. The following debits and credits will be inserted into the transactions table for each account payable line with the following conditions:

• Product costing is enabled AND
• Product field is populated AND
• Product has a value for inventory type of: "purchased" OR "raw material."

Debit/Credit	Amount	Source	Example GL Account
Debit	$500	Inventory Variance set in Accounting settings	5010-Purchase Price variance
Debit	$4,500	Vouchers payable set in Accounting Settings	2010-Vouchers payable
Credit	$5,000	AP Control GL Account set in Accounting Settings	2000-Accounts Payable

 

A user pays an account payable for $500. Upon posting the cash disbursement, the debit and credit are as follows:

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$500	AP Control GL Account set in Accounting Settings	2000-Accounts Payable
Credit	$500	Cash Account on Cash Disbursements (Defaulted from Accounting Settings)	1000-Cash

 

The Journal Entry Line is simply a way to manually adjust or update your books. Examples of this are payroll, accruals, or corrections. In the example below, a user accrues a supply expense of $500 in the current month. The debit and credit are created as follows upon posting:

The scheduled revenue and expense object is a way to amortize various transactions such as billings, accounts payable, and prepaid expenses to multiple accounting periods. In this example a user books a scheduled depreciation expense of $500 in the current month. Upon posting the scheduled revenue and expense the following debits and credits will be entered:

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$500	Scheduled Revenue and Expense	6000-Depreciation Expense
Credit	$500	Scheduled Revenue and Expense	1800-Accumulated Depreciation

 

A time card day is an entry for a single days worth of work for a particular time card line. In this example Andrew books four hours of time on Project X/Project Task: Design. Let's also assume Andrew is paid $10 an hour and is set up as an hourly employee. Upon posting the time card the following debit and credit will be entered into the transaction table.

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$40	Labor GL Account on Project Task	5000-Labor Expense
Credit	$40	Labor Clearing GL Account on Accounting Settings Tab	2000-Accrued Payroll

Special Note - The value for cost in a time card day will vary based on the employees cost set up as hourly or salary. Please see the labor costing section of the help for more information about the value entered for a time card day.

 

Please note there are no accounting transactions associated with the sales order inventory movement. Inventory is relieved from available quantity (Inventory Balance Object) via a sales order inventory movement in the allocation process. However inventory is relieved from the general ledger when the sales order is billed. Please see the billing line section above for more information on how the general ledger records the relief of inventory. This was designed so that inventory could be reserved for specific orders, but still remain property of the company in terms of financial liability.

 

Debit/Credit	Amount	Source	Example GL Account
Debit	Amount	Work in Process GL Account on Accounting Settings	1300-Work in Process
Credit	$10	Inventory GL Account on Product	1500-Inventory

 

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$10	Inventory GL Account on Product	1500-Inventory
Credit	$10	Credit GL Account on Inbound inventory movement	5000-Cost of Goods Sold

Inventory movements with a type of Non-Accounting and Transfer do not book an entry into the general ledger. These types of movements only effect the inventory balance.

 

An outbound inventory movement is used for miscellaneous adjustments of inventory such as scraping material. In this example Andrew is going to enter an outbound inventory movement of one "Product X" with a unit cost to $10. Upon saving the record the following debit and credit are entered into the transaction table:

 

Debit/Credit	Amount	Source	Example GL Account
Debit	$10	Debit GL Account on Inbound inventory movement	5000-Cost of Goods Sold
Credit	$10	Inventory GL Account on Product	1500-Inventory

Inventory movements with a type of Non-Accounting and Transfer do not book an entry into the general ledger. These types of movements only effect the inventory balance.

 

A purchase order inventory movement is inserted when he purchase order is received. The receipt is done at standard cost. In this example let's assume Andrew received one "Product X" with a unit cost of $10. Upon recording the receipt against the purchase order, the following debits and credits delete entered in the transactions table: