Financial Management Module - General Ledger ( Part - 1)

General Journals:

They are used to post information into general ledger and other accounts. I have used cronus canada company as an example in this blog.

fig. 1, General Journals

• General Journals are also used to post cost allocations and other adjustments to the accounts.
• Its also used to enter information into recurring journals which are used when the company needs to allocate recurring entry lines in addition,
• General journals enable users to reverse and correct incorrect entries when necessary.
• General journals are used to enter data into the general ledger accounts and other accounts such as customers, vendors and banks. 

Journal entry system has 3 layers,
1. Journal templates,
2. Journal Batches
3. Journal Lines

                                          fig. 2 and fig. 3, shows hierarchy of Journals.









Although, all these 3 layers are always present, Only journal lines and batch name will display in a journal window.

You can refer to my another blog regarding Overview of Journal Template, Journal Batch and Journal Lines to know about 3 layers of journals in detail.

Journals are used for different types or groups of entries and can be applied to other application areas such as purchase, sales, cash receipts, payments, intercompany (IC).

fig 4, shows different types of journals

• Each journal type is setup with its own journal template.
• Journal template is used to provide the basic journal structure and to specify default information for all batches.

There're several standard general journal templates set up in the application areas, these templates cover the most common routines that're used in the program.

In all journal templates, entries can be posted to the general ledger, customer, vendor and fixed asset accounts.

Some standard templates are automatically setup with the default batch as shown in below fig.

fig. 5, template holding setup as default batch 

• Journal batches are created based on journal templates.
• Batches that are created from a specific template have identical structure, default settings and information. These similarities are defaults that can be changed for each journal batch.

Journal batches are frequently used to separate one users entries from another.

For ex.
Accounting manager and the book keeper.

fig 6, accounting manager and book keeper

Accounting manager makes entries and post them later upon approval.
To keep accounting manager entries from becoming mixed with bookkeepers entries separate batches are assigned to the two users.

Journal lines are the entries that must be posted.

Information entered in journal lines includes account no.'s, posting date, amounts, offsetting accounts.

fig 7, information to be entered in different fields of journal lines

The lines entered in journal are temporary and can be changed as long as the journal has not been posted.


Journal lines can be entered in different ways,

For a simple journal - where debit amount equals credit amount, it can be entered on a single journal line with the use of the balance account on that line. Each line is balanced itself.

fig 8, simple journal line
(Balance account no. included for balancing the amount)

For more detailed entries, an account can be entered on each line with an associated transaction amount while leaving the balancing account blank all lines will balance as a group.

fig 9, more detailed entries in journal line
(Balance account no. not included, balancing happens based on amount values in 2 different lines)

I will discuss with some more Live examples of General Journal transactions in my next blog with 3 scenarios, Stayed tuned on this blog.

Any doubts? Drop your questions to my mail id,
mail2harikiranbm@gmail.com