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:
- You can’t use more than 1 A/R or A/P account in a single journal entry
- 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:
Here’s an example of a General Journal Entry to 1 A/P account that meets the restrictions:
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.)
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.