General Ledger Journal Entry Reversals in Sage 100: A Comprehensive Guide
In the ever-evolving arena of business, the need to reverse general ledger journal entries becomes an inevitability. Therefore, integrating a comprehensive accounting solution, such as Sage 100, which accommodates these situations, is crucial. There exists a multitude of reasons why general ledger journal entry reversals may be required. Gaining insight into these potential circumstances can markedly elevate your business's financial precision and operational efficiency.
Why Reverse a General Ledger Journal Entry in Sage 100?
1. Error Correction: Errors can occur during the recording of journal entries, including misposted amounts or transactions recorded in the wrong accounts. In such instances, reversing the transaction is necessary to rectify the error.
2. Accrual Adjustments: At the conclusion of an accounting period, you may have made accrual entries for revenues or expenses that were earned or incurred but not yet received or paid. Upon receipt or payment in the new accounting period, these accrual entries need to be reversed to avoid duplicating the transactions.
3. Estimated Entries: Sometimes, journal entries are recorded based on estimates, such as an estimated tax expense. When the actual amount is known, the original estimated entry must be reversed and replaced with the actual amount.
4. Reclassification: If an amount was initially posted to an incorrect account and needs reclassification, reversing the original entry is required.
Regardless of the reason for reversal, it's paramount to maintain a clear audit trail for transparency and accountability. The original entry should never be deleted; instead, a new reversing entry should be created. This process ensures that your accounting records accurately reflect all changes made.
How to Reverse a General Ledger Journal Entry in Sage 100
Here, we present two methods for reversing journal entries in Sage 100:
Method 1
This involves reversing the journal entry in General Journal Entry, using the date it was originally posted.
1. Open General Ledger, Main, General Journal Entry.
2. Enter the same Source Journal, Entry Number, and Posting Date as in the original entry.
3. Click the Lines tab and enter the appropriate journal information. If the original line item was a credit, the reverse entry would be a debit.
4. Click the Accept button.
5. Print and update the General Journal.
Method 2
This method involves creating a reversal and adding a journal comment noting the reversal. You must print or preview the entry in General Journal Entry before updating it.
Note: In Role Maintenance, you must select 'Allow Journal Reversal' on the Security Event tab to enable the button.
1. Go to General Ledger, Main, Account Maintenance (enter account number to reverse the transaction).
2. Click on the Transactions tab.
3. Highlight the transaction you wish to reverse and click the Journal Zoom button or double-click the transaction.
4. Click the Journal Reversal button.
5. Open General Ledger, Main, General Journal.
6. Go into General Journal Entry, click on the Flashlight, and select the applicable journal entry.
7. Verify the posting date is correct. If it needs to be corrected, change the date at this time.
Note: The posting date of the reversal will use the General Ledger accounting date. if you are reversing a journal from a prior period you may need to reopen the General Ledger period in G/L Options.
8. Print or Preview the General Journal.
9. Click Yes to update the General Journal.
Should you have any questions or need support with managing your Sage 100, we at Ardent Consulting are at your service. Our team of experts is ready and eager to help you navigate your system challenges and optimize your business's potential. We prioritize your business’s health and are committed to supporting your journey every step of the way.