The debtor adjustment (transaction number prefix BA) is a special type of general journal used to post adjustments to the debtors ledger on one or more files. It allows debits or credits to be posted without raising a new bill or posting a receipt. It is typically used to record when a debtor receipt becomes a bounced cheque, however it can also be used to correct allocation problems.

 

In addition to the selection of general account (usually a bank account) that forms the other side of the transaction, there is also provision to indicate a related transaction and a reference number. For a bounced cheque, the related transaction is the cheque that bounced and the reference is the cheque number.

 

This type of transaction always affects the balance on the debtors controlled account. The selection of other accounts is not allowed. GST is handled as though the transaction were a debtor receipt. Unless you select the 'adjust GST only' option, the debtor balance will be affected by the gross total of the transaction.

 

When used to record a bounced cheque, the debtor adjustment transaction reverses the ledger effect of the original receipt on both the debtors and GST accounts. The bounced cheque wizard will additionally remove allocations from the original receipt transaction, thus allowing any subsequent transaction to pay the bill. (Note: Where a bounced cheque has been recorded, the file will always show the amount of the cheque as 'unallocated' - this is normal and necessary.)

 

The debtor adjustment transaction also allows you to correct problems with allocation; you can post a transaction which has no net effect on the debtors controlled account, but which journals GST previously unaccounted for. In this scenario, there is no related transaction. (See How to post a debtor adjustment to capture missing GST)