Costing Received Amounts to G/L

In the lesson on Corporate Oversight, we look at how information moves from the subsystems to the General Ledger. Basically, Abio processes the different subsystems that receive and pay money, and creates G/L transaction records. These records post costs to the general ledger, and can be reviewed. You can then choose to move the amounts to the respective G/L accounts.

In this lesson, we’ll look at how g/l transactions are created from accounts receivable payments and invoices.

Costing Amounts

To cost amounts from receivables to the general ledger, navigate to [b] Receivables, then [m] Cost to G/L.

posting costs to general ledger

Abio looks for the oldest uncosted invoices or payments and prompts you to transact receivables for that period.

posting costs to general ledger
[b] Receivables | [m] Cost to G/L
Invoices

Chronologically, you created invoices first, so we’ll look at that first. Abio process all the uncosted invoices in the selected G/L period. Each invoice is posted to either a job, equipment, or a G/L account. The description of the g/l transaction for individual invoice items is the client, the invoice and the item. For example, if an invoice for client BOBCON, invoice INV123, item 4 is transacted, the description would be ‘BOBCON INV123 4’.

  • If the invoice item is posted to a job, then the labour, material, equipment and subcontract amounts are credited to the appropriate J/C revenue accounts.
job cost control accounts
[d] General Ledger | [u] Set Up | [f] Control Account
  • If the invoice is posted to equipment, then the amounts are credited to the equipment revenue account.
[d] General Ledger | [u] Set Up | [f] Control Account
  • If the invoice is posted to a G/L account, the amounts are credited to the invoice’s G/L account.
  • PST (provincial sales tax) is administered at the provincial level, so the PST is credited to the province’s PST G/L account. Each invoice can be posted in a different province, so the PST is posted for each invoice. GST and HST will be accumulated into a single invoice summary transaction.
[b] Receivables | [u] Set Up | [a] Provincial Sales Tax Entry
Invoice Summary Transactions

The amounts from all the invoices processed are summarized and posted as ‘Invoice Summary’ transactions.

[d] General Ledger | [u] Set Up | [f] Control Account
  • The net receivable for all the invoices transacted is credited to the A/R net receivable control account.
  • The holdback receivable for all the invoices transacted is credited to the A/R holdback receivable control account.
  • The GST for all the invoices transacted is credited to the A/R GST payable control account.
  • The HST for all the invoices transacted is credited to the A/R HST payable control account.
A/R Payments

After the invoices are costed, Abio processes the payments. The amount of each payment is credited to the bank account. The description of the g/l transaction for individual payment items is the client’s name followed by the payment number. For example, if a payment from client ‘Bobs Construction’ (BOBCON), payment 100, is transacted, the description would be ‘Bobs Construction 100’.

Abio uses the same bank account for payables and receivables.

[d] General Ledger | [u] Set Up | [f] Control Account

When we posted the invoices, we credited the net receivable and holdback receivable accounts with the amounts of the invoices. When we receive payments, we reverse those amounts by debiting the receivable accounts. This is done once for all the payments being transacted, and is posted as ‘Payment Summary’.

[d] General Ledger | [u] Set Up | [f] Control Account

When the receivables are successfully costed to the general ledger, the g/l transactions are listed.

Run the Trial Balance and G/L Update utility to update these costs to their general ledger accounts.