Contra Accounts to use with Customer and Supplier Journals

**kevvie** · 05-Apr-17, 04:10 PM

Hi,
I need to do some journals, but I don't know which contra account to use:

Example;
Supplier Account
Ref: 00004004
Amount: +R761.59

I don't know which contra account to use to do it. If I choose adjustments, the system says it's a Inventory account. The system won't allow me to use just 0000/000. When I click on settings, it shows 0000/000 however when I click on close it won't let me, so I chose 2100/000 just to let me be able to exit. It won't allow me to use control accounts either.

Are there accounts to use by rule of thumb or do I have to create my own accounts to use for these kinds of journals ?

**Rowan Johns** · 05-Apr-17, 04:59 PM

Hi kevvie

Not to sure why my reply is not going up.

For supplier account you could use 9000/000 supplier control account as the contra account

But if you're doing a supplier journal, you would use an expense account for the contra account (such as telephone / postage / stationery, etc. - whatever you spent). If it's a supplier journal for items you're going to re-sell, you would use a cost of sales account (usually an account in the 2000-2999 range)

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**Neville Bailey** · 06-Apr-17, 06:44 AM

The question that needs to be asked is what is the reason for the supplier journal?

Give me the answer to that question and I can advise you what contra account to use.

**kevvie** · 06-Apr-17, 09:33 AM

Originally Posted by Neville Bailey

The question that needs to be asked is what is the reason for the supplier journal?

Give me the answer to that question and I can advise you what contra account to use.

Hi Neville, always nice to hear from you.

Let me try to explain.

I have a supplier which is also my customer. So last year creditors dept decided to do a journal to deduct what we owe them and what they owe us. I now decided to reverse these journals and let the accounts be paid the normal way (they pay us, we pay them, no journals). The reason is that creditors dept now want invoices corresponding to amounts outstanding, long story.
They did a journal on contra account 2100/000. If I am not mistaken they had to use Sales 1000/000, but what contra account for the suppliers as I don't have a Purchases account. Only a Purchase Variance.

The amount is small, R1590.00. Credit dept did a journal to both Supplier and Customer account.

I never know which accounts to use! Save me now

**Neville Bailey** · 06-Apr-17, 01:02 PM

Based on what you've described, then I would use any suspense account (such as 9990/000), as the net balance will be zero in the suspense account.

If the supplier account is owed less than the what the customer owes you, then process a supplier journal to debit the supplier account with the full amount owed, and use 9990/000 as the contra account (credit). Then process a customer journal to credit the customer account with the amount you processed earlier, and use the same 9990/000 account as the contra account (debit).

**kevvie** · 10-Apr-17, 03:25 PM

Originally Posted by Neville Bailey

Based on what you've described, then I would use any suspense account (such as 9990/000), as the net balance will be zero in the suspense account.

If the supplier account is owed less than the what the customer owes you, then process a supplier journal to debit the supplier account with the full amount owed, and use 9990/000 as the contra account (credit). Then process a customer journal to credit the customer account with the amount you processed earlier, and use the same 9990/000 account as the contra account (debit).

Thanks very much, Will have a look at it.

**laurencalefato** · 05-Feb-21, 11:02 AM

Hello

Im very junior when it comes to bookkeeping.

There was a system error in our company where an invoice was created without VAT - the consultant then realised that the vat was missing and fixed the invoice so that it had VAT. But when we pull the statement, it shows the old amount still and doesnt show the new amount with the vat.
The system administrator as said that he can see what the problem is but that it cant be fixed - and therefore I need to do a journal for the vat so that it will show on the statement.
So I want to know if I just go to GENERAL JOURNALS, choose the customer account nr, put in the vat amount that needs to be added, then D or C? and which contra-account?

Your help will be greatly appreciated.
Regards, Lauren

**Kevin Smith** · 09-Feb-21, 08:27 AM

Use customer journals. When you put in the entry to the customer in the journal, change the tax type to use the 100% vat adjustment tax type. Select any contra account. Then click on the preview button at the bottom left and preview all lines. You can then confirm if the entry is going to the customer account and the vat control account correctly. If you just post the entry to the vat control account, it will not reflect on your tax type report.

**laurencalefato** · 10-Feb-21, 10:02 AM

Originally Posted by Kevin Smith

Use customer journals. When you put in the entry to the customer in the journal, change the tax type to use the 100% vat adjustment tax type. Select any contra account. Then click on the preview button at the bottom left and preview all lines. You can then confirm if the entry is going to the customer account and the vat control account correctly. If you just post the entry to the vat control account, it will not reflect on your tax type report.

Thanks for the info Kevin.