Debtors adjustments up and down assist in moving (or transferring) from one debtor to another.
If the balance outstanding is to increase, use a debtors adjustment up. If the balance outstanding is to decrease, use a debtors adjustment down. Reducing will create a credit that can be applied to reduce a current balance. Increasing will create an amount that needs to be paid.
Debtor adjustments, whether they are up or down, do not represent COGS of stock value, and need to be allocated to an expense or income account in the general ledger. Jim2 will prompt to allocate the adjustment to a general ledger account, and create a journal to be able to balance the transaction.
Debtors adjustments should only be performed to resolve discrepancies of petty monetary values with debtors. Do not use debtor adjustments if there is any stock involved, as money values are only being moved – stock on hand levels are not being adjusted.
Amounts can be added to a debtor's record without having to invoice the customer. This is useful when bank fees need to be added for a dishonoured cheque, etc.
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To reverse (or cancel) a debtors adjustment, add a further adjustment opposite to the first one, ie. if an adjustment up was performed, do an adjustment down. |
How to
Enter a Debtor Adjustment Down