Frequently Asked Questions

How do I enter splits into the General Journal?
Last Updated a year ago

By default the program requires a debit and credit account for each line item in the journal. This is to avoid the dreaded unbalanced transaction problem that can occur when people enter splits in the traditional manner. Using the traditional method it is possible to accidentally have more credits than debits or vice versa; this is called an unbalanced transaction and is not valid in double entry bookkeeping.

Example: You paid for two expenses with the one payment, one item cost $60 and the other item cost $40.
$100 Cr Bank Account
$60 Dr Expense 1
$40 Dr Expense 2

The default behaviour of bookkeeping is to treat each transaction separately so there are two transactions, one transaction for each expense that was purchased. These are entered as follows into the journal:

Line 1: $60 , Dr Expense 1 , Cr Bank
Line 2: $40 , Dr Expense 2 , Cr Bank

Using this method it is very easy to cross check the entries in the bank ledger with the entries in the expense ledgers. The program aggregates the ledger entries for the same account when displayed on a bank reconciliation so that you see $100 Cr Bank on the screen when reconciling the bank account.

If you prefer to enter splits exactly as specified in the example and be prepared for the potential of unbalanced journal entries by accident then you can enable this behaviour in the app settings. In App Settings select Journals and then turn on "Allow Journal Splits".

Then you would enter three line items as follows:
Line 1: $100 , Cr Bank
Line 2: $60 , Dr Expense 1
Line 3: $40 , Dr Expense 2

In this case it is not possible to directly cross check the bank entry with the individual expense ledger entries since the amounts are different and there is nothing stored that definitively identifies which portions of which amounts are applied to which ledger accounts. In this trivial example it is possible to deduce that the $100 is split between Expense 1 and Expense 2 accounts. In a more complex example with multiple Cr accounts and multiple Dr accounts it is not possible to definitely identify which amounts went where; only the end result is known.

Double entry bookkeeping is all about tracking the transfer of value from one ledger account to one other ledger account (hence the term double entry). Using the "traditional" split method can obscure these movements in some cases.

In our opinion the default behaviour is better, simpler, safer, and much easier to cross check however if you prefer the latter behaviour then you can choose to use it by changing the App Setting mentioned above.

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