About General Ledger Journal Entries Generated from Credit Notes

Credit notes are assigned source code PO-CR on the G/L Transactions report.

When credit notes are posted in Accounts Payable, journal entries are created during posting or Day End Processing to:

  • Debit the vendor's payables clearing account.
  • Credit the vendor's payables control account.

Credits for Additional Costs

When you post a credit note for an additional cost:

  • The expense account you assign is debited.
  • The vendor's payables control account is credited.

Credits to Returns

When you post a credit note to a return with no quantity or cost changes:

  • The vendor's payables control account is debited.
  • The item's payables clearing account is credited.

When you post a credit note to a return that includes cost changes:

  • Purchase Orders debits or credits the payables clearing and inventory control accounts.
  • When the credit note is posted in Accounts Payable:
    • The payables control account is debited.
    • The payables clearing account is credited.

Credits to Invoices

When a credit note is posted for an invoice, Purchase Orders creates a journal entry to:

  • Debit the payables clearing account.
  • Credit the inventory control account.

Day End Processing creates a credit note for the transaction in the Accounts Payable batch. When you post the batch in Accounts Payable, a journal entry is created to:

  • Debit the payables control account.
  • Credit the payables clearing account.

Item Cost Adjustments

When you post credit notes to adjust item costs, Day End Processing creates general ledger journal entries to:

  • Debit the payables clearing account.
  • Credit the item's inventory control accounts.

When you post the credit note in Accounts Payable, a journal entry is created to:

  • Debit the vendor's payables control account.
  • Credit the payables clearing account.

Taxes

Allocated taxes from credit notes are posted to the same general ledger accounts as costs.

Recoverable and expensed taxes are posted to the accounts specified for the tax authorities in Tax Services and the inventory control or payables accounts used for the related costs.