Reversing Journal Entries

What you'll find

What is a Reversing Journal Entry?

What are Reversing Journal Entries for?

When would I use a Reversing Journal Entry?

What are the Advantages of using a Reversing Journal Entry?

Adding Reversing Journal Entries

Editing Reversing Journal Entries

Deleting Reversing Journal Entries

Reversing Journal Entry Reporting

 

What is a Reversing Journal Entry?

A Reversing Journal Entry is simply a posting that reverses a previous posting.

In agrē, reversing entries are created automatically for many types of tasks.
For example when inventory is received, postings are made to the inventory Asset and inventory Accrual accounts (you want to record the increase in asset value right away, but since you don't have a bill technically you don't owe the supplier anything so it can't be included among your payables - at least not yet). When you get the bill, and the inventory receipt is imported to a purchase invoice, the posting to the accrual account is reversed automatically and the value is posted instead to Accounts Payable (now that you have a bill, the amount is payable and no longer just accrued).

You can setup up your own manual Reversing Journal Entries to generate a posting now (or backdated in the past) that will be automatically reversed at a specified future date.
This allows items to be expensed during the period in which they occur, independent of when the actual money changes hands.

What are Reversing Journal Entries for?

Reversing Journal Entries are designed to help with adjustment postings that are entered after the fact.

When would I use a Reversing Journal Entry?

Reversing Journal Entries are usually part of the month-end (or period- or year-end) process, often used to record accruals such as payroll earned but not yet paid.

What are the Advantages of a using a Reversing Journal Entry

you won't forget to enter the reversing entry
it will be made automatically on the date you specified with no activity on your part

less chance of error
since you don't need to specify which accounts to post to, there is less possibility of an error being made when making the reversing entry

Tip

For entries that require a future date, use a regular journal entry (dated today or in the past) and a one-time recurring journal entry (dated to post in the future).

Adding Reversing Journal Entries

To add a reversing journal entry

Navigate to General Ledger > Enter Reversing Entry.
The Reversing Journal Entry window opens.

In the Posting Date box, enter the posting date of the entry.
Posting dates must be either current or past dates; future dates are not permitted.

In the Reversing Date box, enter the reversing posting date of the entry.
Reversing dates must occur after the posting date; future dates are not permitted.

In the Description box, enter a unique description for the reversing journal entry.

In the Source box, enter the source of the journal entry.
Only general ledger and payroll source entries can exist in journals, such as year end adjustments, depreciation, and bank deposits.

In the Created By box, optionally change the name of the person adding the reversing journal entry.

In the Account column, enter an account for the entry.

Tips

If you need to add a new GL account, click Add Account.

To remove an entry in the table, select the entry and click Remove Transaction Detail.

In the Location column, enter a location to attach the entry to a location.
Location isn’t available for Asset (1), Liability (2), and Equity (3) accounts.

In the Project column, enter a project to attach the entry to a project.
Project isn’t available for Asset (1), Liability (2), and Equity (3) accounts.

Tip

If you need to add a new project, click Add Project.

In the Debit or Credit column, add the entry amount.

In the Description column, enter a description for the entry.
This description appears in the GL Transaction Journal reports.

Enter the remaining debit and credit entries until the balance of the journal entries is $0.00, which is shown in the Difference box.

Note

The Save button is not available until the balance of your journal entries equals $0.00.

Click Save.

Editing Reversing Journal Entries

Reversing journal entries are edited from the Journal Entries window.

Deleting Reversing Journal Entries

Reversing journal entries are deleted from the Journal Entries window.

Reversing Journal Entry Reporting

To view a report on the reversing journal entries that posted, run the GL Transaction Journal.