Pastel Accounting Tip: Journal Contras

[Neville Bailey]

Contras in journals are very handy, in that they serve to create the other side of a journal automatically, thus saving time on data capture.

For example, in a general journal, you might want to debit Printing & Stationery and credit a Loan Account.

The conventional way of capturing this entry would be to capture two line items in the journal, the first line for the debit entry to P & S, and the second line for the credit entry to the Loan Account.

Using the contra feature, you simply capture the debit entry on the first line as usual but, instead of capturing a second line for the credit entry, you enter the ledger account (that has to be credited) in the Contra column on the extreme right of the first line. Whatever has been debited (or credited) in the first part of the line will be credited (or debited) to the account number in the Contra column.

This becomes even more useful when you need to debit a whole batch of expenses to various accounts, but they must all be credited to the same account. If you set the Contra account to a default account number, you don't even need to capture the Contra account number for all the lines! Simply click on Settings at the bottom of the journal screen, and capture the default Contra account code in the top left corner of the Settings screen.