GL Transaction Summary, Payments

Transaction

Type

DR/CR

Account

Automatic Checks (28.9.9) & AP Manual Checks (28.9.10)

AP

DR

CR

CR

CR

DR/CR

Accounts Payable

Cash1

Drafts Payable

AP Terms Discounts

Exchange Gain/Loss

Non-AP Manual Checks (28.9.10)

AP

DR

DR

CR

CR

CR

User-Selected Account

Accounts Payable

Drafts Payable

AP Terms Discounts

Cash1

Check Reconciliations (28.9.13)2

AP

DR

CR

Payments in Process

Cash

Check Voids (28.9.15)

AP

DR

DR

CR

DR/CR

Cash1, Drafts Payable

AP Terms Discoutns

Accounts Payable3

Exchange Gain/Loss

1Or Payments in Process account.

2No GL effect from reconciliation involving cash accounts.

3User-selected account on non-AP checks.

The GL effects of a payment also vary depending on whether it is an automatic or manual check.

When manual checks are for type N (non-AP) amounts, you usually specify a debit account other than AP.

An additional entry is created by automatic checks in foreign currencies. Exchange gain/loss is realized whenever the exchange rate changes between the voucher and the payment. A detailed example is discussed at the end of this lesson.

Check voids create entries to reverse the GL effects of the voided payment.

As we noted earlier, reconciliations create a GL transaction only when the Payment in Process (PIP) option is used.