Journal Entry Procedure
This procedure is designed to provide information on how to complete a Journal Voucher and how to document the Journal Voucher appropriately. Documentation of Journal Voucher transactions is critical to ensuring that journal entry information is identifiable.
Journal Vouchers are the transactions used to update the General Ledger. They may be postings of original transactions, adjustments, reversals, or corrections. Journal vouchers may be used to transfer amounts between General Ledger accounts and project cost codes in order to distribute charges, accrue, reverse, reclassify, or correct data. Entries may involve G/L account transfers within the same account or transfers between different accounts, projects and cost codes.
Journal vouchers are entered in accordance with accounting period deadlines.
Division of Duties
An explanation is required for all Journal Vouchers to ensure that any questions arising regarding a Journal Voucher can be answered by reviewing the transaction description and additional notes. Proper documentation is mandatory as it ensures that there is no need for individual recollection.
The company requires that the documentation must provide enough detail to satisfy an auditor, internal or external. Detailed below is the minimum documentation expected to be included with the Journal Voucher:
It is the responsibility of the individual entering the Journal Voucher to ensure it is entered in a timely manner and that adequate documentation is included. For a correcting entry, include from the original posting any reference number, code, the date originally posted, include an explanation of why the correction is necessary, and any calculation as to how the amount was derived. Remember that any questions may not come up until several years after the Journal Voucher is processed.
If the required documentation cannot be entered into your system, then paper documentation must be retained. The Company must implement internal procedures that allow for the paper documentation to be accessible in the event the transaction is reviewed during an audit. When paper documentation is being retained, indicate in the Notes field of your system that paper documentation is on file.
The following are examples of why paper documentation may be necessary:
Prior Period Adjustments
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