How To: Journal between Nominal Accounts
Table Of Contents
Introduction
Journals allow you to transfer values between nominal accounts without affecting customers, suppliers or bank transactions.
They are commonly used for:
- Entering opening balances.
- Moving balances between accounts.
- Recording accountant adjustments.
- Allocating costs between departments.
- Correcting postings.
This article explains how to create a nominal journal within Khaos Control.
Create a Journal
- Open the [ Accounts | Nominal Accounts | Nominal Accounts ] tab.
- Add the nominal accounts you want to journal between to the lower grid by either:
- Double-clicking the nominal accounts.
- Dragging and dropping the nominal accounts into the lower grid.
- Using Quick Journal Entry.
- Enter the required Debit and Credit values.
- Enter a description in the Note field above the grid.Example:Opening Balances
- Press Ctrl + S or click Save to create the journal.
Understanding Debits and Credits
When creating journals:
| Entry Type | Effect |
|---|---|
| Debit | Moves money into an account |
| Credit | Moves money out of an account |
The journal must always balance, meaning the total debits must equal the total credits.
Flexible Journal Entries
You are not limited to one debit and one credit.
For example, you can have:
- Multiple debit entries and one credit entry.
- Multiple credit entries and one debit entry.
- Multiple debits and multiple credits, provided the values balance overall.
Example 1: Entering an Opening Bank Balance
The example below transfers £100 from an Opening Balance account into a Sterling Bank account.
| Account | Debit | Credit |
|---|---|---|
| Sterling Bank | £100.00 | |
| System Opening Balance | £100.00 | |
| Total | £100.00 | £100.00 |
This increases the balance of the Sterling Bank account while reducing the Opening Balance account.
Example 2: Allocating Wage Costs
The example below moves funds from the Sterling Bank account into several wage expense nominal accounts.
| Account | Debit | Credit |
|---|---|---|
| Staff Wages - Office | £1,298.00 | |
| Staff Wages - Telesales | £1,116.50 | |
| Staff Wages - Warehouse | £789.77 | |
| Staff Wages - Accounts | £461.11 | |
| Sterling Bank | £3,665.38 | |
| Total | £3,665.38 | £3,665.38 |
This journal records the wage costs against the relevant expense accounts while reducing the bank balance.
Tips
- Always ensure the journal balances before saving.
- Use clear notes to make future audits and account reviews easier.
- Review the affected nominal accounts after posting to confirm the journal has been applied as expected.
- Consider using Quick Journal Entry when posting larger journals.
Related Articles
See Also