All financial transactions of the company must be correctly reflected in General Ledger, that is, on the chart of accounts.
The standard rule used for recording accounting transactions is the double-entry rule. This rule means that each transaction (purchase or sale) is recorded to General Ledger with debit and credit entries (each to its own GL account) so that the debit entry amount is equal to the credit entry amount. Generally, there might be more than two entries; however, the total amount debited must be equal to the total amount credited.
The accounts for debit and credit entries are selected so that the accounting equation remains valid once transaction is posted:
Assets = Liabilities + Equity
Any accounting software is created so that it enforces the double-entry rule and checks:
- The debit amount is equal to the credit amount for each document or operation.
- Used GL accounts are from correct sections of the chart of accounts.
However, if the users generally should pick up the accounts manually, errors are unavoidable. To reduce the errors related to selecting incorrect account pairs, FirstBIT ERP uses the GL account pairs that are predefined for each type of document available in the system or for each transaction type.
Alternatively, you can create GL transactions manually by using the Transactions (General Ledger) form. It is recommended that you create GL transactions manually only for those operations for which no standard documents are provided.
Posting Documents of Standard Types
For most types of documents available in the system-- for instance, Invoice, Credit Note, Invoice Received, Debit Note, or Tax Invoice--all the required GL accounts are assigned by default. For some documents, the users must select some of the required GL accounts manually.
If needed, you can replace each default GL account with another GL account from the same section of the chart of accounts by using the Accounting > See Also > Default GL Accounts form, for details refer to Default GL Accounts.
On posting the documents, the application automatically generates valid GL transactions; you can view a posting report that provides information on the generated GL transactions, data for accounting, accumulation, and information registers.
Replacing the Default Accounts in a Document
If you have the appropriate rights (access profile), you can replace the default GL accounts used in a particular document with another accounts; however, each GL account can be replaced strictly within its section of the COA.
To replace some of financial GL accounts, on the Main tab of the document, click the hyperlink which is represented as two comma-separated GL accounts as in an invoice on a screenshot below. Similarly, you can locate and replace the default GL accounts in documents of other types.
Invoice. The link to default GL Accounts
A dialog box with the default GL accounts appears. For example, the screenshot below shows the dialog box for the above invoice.
The GL Accounts dialog box
On the Inventory tab, you can replace the default sales, inventory, or cost of goods sold accounts for each of the sold items.
Invoice. The link to item-related default GL Accounts
To view or replace the accounts for an item, click the accounts link in the GL Account column in the corresponding table row (document line). The GL Accounts: Item dialog box opens.
Invoice. A dialog box for replacing the item's GL accounts
To replace an account, click the arrow button to the right in the corresponding field and select another account from the same section of COA. Click OK to apply the changes and close the dialog box.
Viewing and analyzing GL Transactions
Using the Accounting >See also > General Ledger form, you can view all the GL Transactions generated automatically or posted manually. You can analyze the transactions related to the selected period by using the filters and options available on the form. For details, refer to General Ledger.
Also, for particular documents, you can view and analyze posting reports with information on GL transactions that are generated during document posting. To view a posting report for a document, select the required document in the appropriate list and click the 
button on the list toolbar or open the document and click the 
button on the document toolbar.
For example for an Invoice, the following information on generated GL transactions appears:
A Posting Report for the Invoice. GL Transactions
You can view information on three types of GL transactions generated for each item:
- Issuing inventory for sales with entries to the following accounts: Dr COS: Goods for Resale and Cr: Goods.
- Recording customer debt with entries to the following accounts: Dr: Current Trade Receivables from Customers and Cr: Sales of Goods.
- Recording the entity's output tax payable to FTA with entries to the following accounts: Dr: Current Trade Receivables from Customers and Cr: Current VAT Payable.
Depending on the settings of the selected Dr and Cr accounts, the posting can also contain up to 3 dimensions for each GL account, and for some GL accounts (for which the Accounting by Departments option is selected on the COA) you need to specify associated departments as an additional dimension.
Notice that GL Transaction amounts are shown in the accounting currency (the last column) and in other currencies if other currencies are involved.