JOURNAL ENTRIES IN CBS ACCOUNTS RECEIVABLE

JOURNAL ENTRIES IN CBS ACCOUNTS RECEIVABLE Default GL account numbers... 1 Accrual basis clients... 2 Tax Adjustment (STA)... 3 Cash basis clients... 4 Journalizing all activity through the account... 5 The purpose of this document is to provide information on how CBS posts journal entries to general ledger accounts. Default GL account numbers The table below lists the location in which the default GL account number is specified. GL account name Advertising and Promotion Bad Debts Expense Cost of Discount Account Finance Charge Revenue Returns and Allowances Tax Default location Company Properties or data-entry override during coupon entry Company Properties or data-entry override during write-off entry Company Properties, customer record, or data-entry override Invoice item record Company Properties or data-entry override during invoice entry (on the Tasks / Receivable Transactions / Computations tab) Company Properties Invoice item record Flat amount billing in Company Properties, invoice item record, or data-entry override in Invoice Item Details Company Properties, invoice item record, or data-entry override in Invoice Item Details Customer record or data-entry override (on the Tasks / Receivable Transactions / Computations tab) Company Properties, customer record, or data-entry override (on the Tasks / Receivable Transactions / Items tab) Company Properties Company Properties Journal Entries in CBS TL 20747 Copyright 1997-2009 by Thomson Reuters/Tax & Accounting. All rights reserved. Page 1

Accrual basis clients If your accountant set up your CBS program to use the accrual basis accounting method, the program will post a journal entry to the specified GL account at the time the transaction is finalized. If a transaction is subsequently voided or deleted, the program creates a reversal entry for that transaction. The tables below identify the specific GL accounts to which the program posts the journal entry in the given situation. Notes When voiding or deleting a transaction, CBS creates a reversal transaction of the entries listed below. When unapplying a payment, CBS creates a reversal transaction of the entries listed below for applying the payment type. CBS allows you to void or delete a refund invoice, but it does not allow you to unapply a refund Invoice (entering) Cost of Tax Discount offered Discount Account Created and dated with the same date as the transaction date. Discount expired Discount Account Created and dated the day after the discount expiration date. Discount used (discount honored) (entering) (applying to an invoice) (depositing) Coupon (entering) Coupon (applying to an invoice) Discount Account Created and dated the day after the discount expiration date. s include cash, credit card, check, COD. Cash Advertising and Promotion Payment A coupon is a nondepositable Write-off (entering) Bad Debts Expense A write-off is a nondepositable TL 20747 Page 2 Journal Entries in CBS Copyright 1997-2009 by Thomson Reuters/Tax & Accounting. All rights reserved.

Write-off (applying to an invoice) Credit memo (entering) Credit memo (applying) Finance charge invoice Refund invoice (creating) Refund invoice (applying) Refund check or other payment (creating) Tax Cost of Finance charge revenue Occurs at the same time as applying a refund Occurs at the same time as creating a refund Cash Created in the CheckWriter checkbook. Tax Adjustment (STA) The program creates a Tax Adjustment journal entry under the following conditions: You marked the Include Discount checkbox for the sales tax code. (CBS subtracts the discount from invoice subtotal before applying the sales tax.) Your accountant set up your CBS program to use the accrual basis accounting method. The Discount Honored amount is not equal to the Discount Offered amount when you close the Debit entries Credit entries Discount Honored is greater than Discount Offered tax payable Discount Honored is less than Discount Offered tax payable Journal Entries in CBS TL 20747 Copyright 1997-2009 by Thomson Reuters/Tax & Accounting. All rights reserved. Page 3

Cash basis clients If your accountant set up your CBS software to use the cash basis accounting method, the program will post a journal entry to the specified GL account once cash is received for revenue or dispersed for expenses. The tables below identify the specific GL accounts to which the program posts the journal entry in the given situation. Notes When voiding or deleting a transaction, CBS creates a reversal transaction of the entries listed below. When unapplying a payment, CBS creates a reversal transaction of the entries listed below for applying the payment type. CBS allows you to void or delete a refund invoice, but it does not allow you to unapply a refund Amounts posted to the account will always be zero because CBS debits and credits the account at the time a payment is applied to an The Accounts Receivable account is not included on the Transactions List report. (entering) (applying to an invoice) Coupon (entering) Coupon (applying to an invoice) Advertising and Promotion s include cash, credit card, check, COD. A coupon is a nondepositable Write-off (entering) Bad Debts Expense A write-off is a nondepositable Write-off (applying to an Invoice) Credit memo (entering) Tax Cost of Credit memo (applying) Payment or credit memo (applying to an invoice) Cost of Tax TL 20747 Page 4 Journal Entries in CBS Copyright 1997-2009 by Thomson Reuters/Tax & Accounting. All rights reserved.

Discount used (honored) s (depositing) Discount Account Created when a payment is applied to an Cash Payment Finance charge invoice Finance Charge Revenue Refund (creating a refund invoice) Refund (applying a refund invoice) Refund check or other payment (creating) Occurs at the same time as applying a refund Occurs at the same time as creating a refund Cash Created in the CheckWriter checkbook. Journalizing all activity through the account If you do not want to journalize undeposited payments through the Payment account and unapplied payments through the account, you can set up these accounts to use the account. (Select the same GL account number for the, Payment, and accounts on the tab of the File / Company Properties dialog.) If you do this, the following ramifications will occur. All activity will flow through the account, and CBS will create many in and out journal entries. You should deposit depositable payments before you export to your accountant; otherwise, these amounts will not affect the general ledger. CBS does not validate your data to confirm that depositable payments have been deposited before you export. Journal Entries in CBS TL 20747 Copyright 1997-2009 by Thomson Reuters/Tax & Accounting. All rights reserved. Page 5