Skip to main content

Notifications

Announcements

No record found.

News and Announcements icon
Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Meaning of Journal Ent...
Small and medium business | Business Central, N...
Answered

Meaning of Journal Entry Fields

(0) ShareShare
ReportReport
Posted on by CU10120504-0 11
Hello, I’m new to accounting and newer to NAV software. 
Can someone explain what does each fields of Journal entries mean? 
I mean for example If we click Payables or Cash receipts sections then we should make journal entries and then post it.
Generally I know and understand Payables and Receivables journal entries. 
Receivables: Dr: Accounts receivables, Cr: Sales and then contra entry when paid and similar for Payables too. 
 
but I don’t understand how this works in Nav: 

Document type, Document No, Account type, Account No, Description, Bal.Account type, Bal account No. 
If we make payables: We should credit accounts payable and Debit Purchase or something but in NAV I don’t understand.  We choose document type as payment? Then what and when we write in balancing account? Bank? G/L etc. 
 
Thank you 
  • Suggested answer
    CU10120504-0 Profile Picture
    CU10120504-0 11 on at
    Meaning of Journal Entry Fields
    @KasparsSemjonovs Thank you for explaining. 
     
    Could you please explain me what’s journal entries (three lines) for payments in different currency rather than invoice currency? 
    What will be the document types, acc types and bal accounts? 
  • KasparsSemjonovs Profile Picture
    KasparsSemjonovs 4,011 Super User 2024 Season 2 on at
    Meaning of Journal Entry Fields
    Hi,
    yes - the amount sign refers to the Account. And Balancing account gets the same with opposite sign. 

    When Account - Customer  and Bal. Account = Bank, and Amount is Negative, it means You are decreasing Customer debt, and increasing bank balance.


    If You would enter 2 lines, the result would be exactly the same, You just need to fill in more fields twice - the amount, dimensions, description, date, which makes it higher risk for human error, that something could be forgotten. 
    But it really depends how You want the system to show the data. 

    For Bank Journal batches it is good to set up the Bal. Account Type / No. for specific Bank (therefore have specific batch for each bank account), and then this Bal. Account is already pre-filled when You create lines in the journal, therefore it makes it even faster to create lines. But of course it would be good to set up XML file bank statement import, so You don't have to enter all the payments manually. 
  • Suggested answer
    CU10120504-0 Profile Picture
    CU10120504-0 11 on at
    Meaning of Journal Entry Fields
    Hello, Kaspar. 
    Thank you for full explanation. now everything is more clear.

    I have one more question about Bal. Account Type
    Example: If customer pays us, we choose Document type: Payment, Account Type: Customer, Bal. Account Type: Bank Account
    Amount: - Negative

    As I understand this in "Accounting Language", when customer pays us, their amount goes down (Cr.Cash) and that's why the Amount is
    -Negative? and our Amount goes up and that's why Bal.Account.Type is Bank Account? Do I understand it correctly?

    And also what If we use two lines as you mentioned instead of using Bal.Account.Type ? What will be the result of journal entry?

    Thank you 

     
  • Verified answer
    KasparsSemjonovs Profile Picture
    KasparsSemjonovs 4,011 Super User 2024 Season 2 on at
    Meaning of Journal Entry Fields
    Hi,
    lets start slowly, as it could get a big topic to explain :)

    So in journals You have the possibility to register amounts directly to GL accounts, or to the other identifiers (customers/vendors/bank accounts/ also Fixed assets, but thats a different topic)
     
    Account Type and Account No. = You choose to where You want to register transaction.
    • If You choose G/L account - it will be put directly to  G/L account balance, without impacting anything else. Usually used for corrections/some reclassifications of amounts or department dimensions etc. 
    • if You choose Customer/Vendor/Bank Account - then the transaction will be registered to the chosen Customer/Vendor/Bank Account card. And in background You would need to understand that this will be posted to Receivables/Payables/Bank G/L account that is defined in Customer/Vendor/Bank posting group on this Customer/Vendor/Bank account card.
    Document Type - in case of Customer/Vendor - it can be left blank, but if one type is chosen, then system makes additional validation, that the amount is entered correctly (for example if payment and customer, system checks that amount is negative). Also later it is easier for users to understand if the transaction was a payment or invoice/credit memo. But from journals usually the Payment option is used, as invoices and CM's are created via documents. If The Account type is G/L then the Document Type is just for information.

    Document No. - hopefully self explanatory - just a number with which this transaction will be registered in system. For journals usually a No.serie is attached to each bach (the same or different) and it makes easier later for users to quickly understand where from the transaction was registered (for example a batch for corrections could have a no serie COR0000001...)

    Description - hopefully self explanatory - just a description that will be seen in General ledger entries, and Customer/Vendor/Bank account ledger entries.

    Bal. Account Type and Bal. Account No. = The same as first point of account type and account no. This is used to quickly provide the opposite side where the transaction will be posted. (for example if Customer payment is done, then Account type/no is customer, and balancing part is Bank Account). You can choose to skip filling this field, if You prefer to create 2 (or more) separate lines in journals with the same document no. and the same date - that would balance each other.

    Let me know what is still unclear and I will try to help You out.

Under review

Thank you for your reply! To ensure a great experience for everyone, your content is awaiting approval by our Community Managers. Please check back later.

Helpful resources

Quick Links

Congratulations 2024 Spotlight Honorees

Kudos to all of our 2024 community stars! 🎉

Meet the Top 10 leaders for December

Congratulations to our December super stars! 🥳

Start Your Super User Journey

Join the ranks of our community heros! 🦹

Leaderboard

#1
André Arnaud de Calavon Profile Picture

André Arnaud de Cal... 291,735 Super User 2024 Season 2

#2
Martin Dráb Profile Picture

Martin Dráb 230,466 Most Valuable Professional

#3
nmaenpaa Profile Picture

nmaenpaa 101,156

Leaderboard

Featured topics

Product updates

Dynamics 365 release plans