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Are There Restrictions On Making General Journal Entries To A/R and A/P Accounts?

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Yes, there are a few restrictions on making General Journal Entries to Accounts Receivable (A/R) and Accounts Payable (A/P) accounts.

Normally, the preferred way to change the balance in an A/R or A/P account is by recording transactions, such as customer invoices or vendor bills. However, sometimes it’s more convenient to make a General Journal Entry.  A common use of General Journal Entries to A/R or A/P accounts is to set up customer or vendor balances in a new QuickBooks company file.

If you opt to make a General Journal Entry to an A/R or A/P account, such entries are subject to these restrictions:

  1. You can’t use more than 1 A/R or A/P account in a single journal entry
  2. You must enter a customer name for a General Journal Entry to an A/R account and a vendor name for a entry to a A/P account

Here are some of the warnings you’ll see if you attempt to violate these restrictions:

QuickBooks Premier 2009 General Ledger Warning 1
QuickBooks Premier 2009 General Ledger Warning 2
QuickBooks Premier 2009 General Ledger Warning 3

Here’s an example of a General Journal Entry to 1 A/P account that meets the restrictions:

QuickBooks Premier 2009 GL Make General Journal Entries Accounts Payable

While not an absolute requirement, QuickBooks prefers that transactions involving A/R or A/P accounts have that account on the first line of the General Journal Entry.  The first line of a General Journal Entry is the source of the transaction.  Sources and targets are an important concept in QuickBooks.  For more information, see our article on sources and targets.

When you record a General Journal Entry to an A/R or A/P account, the General Journal Entry will appear in the transaction list for the customer or vendor specified in either the Customer Center or Vendor Center – provided that the A/R or A/P account is on the first line of the general journal entry and is therefore the transaction source.  General Journal Entries that debit (increase) A/R will be similar to a customer invoice and can be paid in a similar fashion.  General Journal Entries that credit (increase) A/P will be similar to a vendor bill and likewise can be paid just like other vendor bills.  However, some data fields are not filled in when recording transactions for a customer or vendor via a General Journal Entry.  For example, the Terms and Due Date fields on a General Journal Entry for a vendor are left blank, as shown below. (Note: The single screenshot below shows a customized Vendor Center with the separate Pay Bills window placed on top of it to illustrate several of the points discussed in this article.)

QuickBooks Premier 2009 Vendor Center Plus Pay Bills

Beyond restrictions on making General Journal Entries to an A/R or A/P account, there are other restrictions that apply to making General Journal Entries, such as currency restrictions in multicurrency environments.

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Do Deposits Appear In a Center, Such As the Customer Center?

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Deposits don’t appear in a Center, such as the Customer Center under normal circumstances.

The 3 Centers (Customer, Vendor, and Employee) only include transactions where the transaction source matches the Name shown in the Center.  For a Deposit, a customer is not considered the transaction source.  Instead, it’s the target.

Sources and targets are an important concept in QuickBooks.  For more information, see our article on sources and targets.

If you record a Deposit via the Make Deposits window, the source is the bank account.  Even if you enter a Name in the Received From field, that Name is associated only with targets, not the source.  There’s no way to assign a source Name in the Make Deposits window.

However, if you open the Register for the bank account to which the funds were deposited, you can edit the Name assigned to a Deposit.  Under normal circumstances, a Deposit could be made up of funds from multiple Names, so QuickBooks doesn’t assign a Name to the Deposit.

The first 2 entries on the screenshot below are typical deposits where no Name was assigned.  The third entry is a Deposit made via the Make Deposits window but where we’ve edited the Name in the bank account register to include a Customer:Job name.  This edited Deposit does appear in the Customer Center for that Customer:Job, as shown below.

While it’s technically possible to make a Deposit appear in a Center, we don’t recommend it.  A Deposit made up of funds from multiple Names can never be made to appear in a Center for more than 1 Name, since only 1 Name can be assigned to the source.  That makes expecting Deposits in a Center very unreliable – something that is never a good idea for an accounting system.

QuickBooks Enterprise Solutions 10 Deposit In Center
QuickBooks Enterprise Solutions 10 Deposit In Center 2
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