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Common GL Entry Types

This reference guide provides a quick lookup for common accounting transactions and how they affect your General Ledger (GL).

Standard Business Operations (Automatic)

These entries are typically generated automatically by source documents.

Transaction Type Debit Account Credit Account Trigger Action
Sales Invoice Accounts Receivable Revenue / Output VAT Validating Invoice
Customer Payment Bank / Cash Accounts Receivable Posting Payment
Vendor Bill Expense / Asset / Input VAT Accounts Payable Validating Bill
Vendor Payment Accounts Payable Bank / Cash Posting Payment
Stock Receipt Inventory (Asset) Inventory Valuation (Liability/Interim) Validating Receipt
Cash Transfer Bank (Destination) Bank (Source) Internal Transfer

Common Manual Adjustments

These entries are usually recorded manually using the Journal Entries module.

1. Asset Depreciation

Recording the monthly loss of value for equipment or vehicles.

Line Account Type Account Name (Example) Debit Credit
1 Expense Depreciation Expense ✅
2 Asset (Contra) Accumulated Depreciation ✅

2. Accrued Expenses

Recording an expense that has been incurred but not yet billed (e.g., electricity for the current month).

Line Account Type Account Name (Example) Debit Credit
1 Expense Utilities Expense ✅
2 Liability Accrued Liabilities ✅

3. Prepaid Expenses

Paying for something in advance (e.g., annual insurance).

Line Account Type Account Name (Example) Debit Credit
1 Asset Prepaid Insurance ✅
2 Asset Bank / Cash ✅

4. Correcting a Mispost

Moving a transaction from an incorrect account to the correct one.

Line Account Type Account Name (Example) Debit Credit
1 Expense Correct Account (e.g., Office Supplies) ✅
2 Expense Incorrect Account (e.g., Repairs) ✅

The Golden Rules of Debit and Credit

Account Category Increase (+) Decrease (-) Normal Balance
Asset Debit Credit Debit
Liability Credit Debit Credit
Equity Credit Debit Credit
Revenue Credit Debit Credit
Expense Debit Credit Debit