Nivesh Sahayak App › Help › Accounts and final accounts

Journal entries

A journal entry moves amounts between accounts when no bill or payment fits: discount allowed or received, interest charged, a bad debt written off, or a correction. Debits must equal credits.

Step by step

1. Open Journal entries. Menu › Journal entries › New journal entry.
2. Date, Number and Narration. Write in the narration why the entry is made.
3. Add the lines. For each line choose the Account (Party, Cash, Bank, Expense, Other income, Capital, Drawings, Loan taken, Loan or advance given, Fixed asset, Sales, Purchases, TDS receivable, TDS payable, GST input or output CGST/SGST/IGST, Round off), the party name if it is a party, and the amount under Dr or Cr. Press Add a line for more.
4. Check the totals. The bottom line shows Dr and Cr; they must be equal before you can save.
5. Save.

Worked example

Verma Paints pays ₹3,700 and you let go of the last ₹26 of a ₹3,726 bill. Record ₹3,700 in Money received, then a journal entry: Dr Expense "Discount allowed" ₹26, Cr Party Verma Paints ₹26. Their balance becomes nil.

A customer who owed ₹2,000 has closed down: Dr Expense "Bad debts" ₹2,000, Cr Party ₹2,000.

Common mistakes and how to fix them

• Using a journal for a cash payment. Use Money paid or Expense; they update the cash book properly.
• Capital or loans through journals by hand. Use Capital and loans: it makes the journal entry for you with the right accounts.

Related help

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