Reversing Journal Entries

Journal entries can also be used to reverse ledger entries that have already posted to accounts. These are known as reversing journal entries.

You may want to set up a journal entry to automatically reverse itself. Reversing journal entries do not require you to manually track the transaction. For example, you enter an accrual transaction for revenue earned but not yet received. Next month, you must make a journal entry to reverse that accrual entry.

A reversing journal entry is an exact opposite of the original journal entry. For example, the original journal entry debits Accounts Receivable $100, credits a revenue account $100, and has an exchange rate of 1.5. The reversing entry credits Accounts Receivable $100, debits the revenue account $100, and has an exchange rate of 1.5 regardless of the current exchange rate.

A reversing journal entry is also permanently linked to the original entry. Any change you make to the original entry affects the reversing transaction. You cannot directly edit a reversing journal entry.

The date of the reversing journal entry is tracked in system notes.

To create a saved search for reversing journal entries, include Reversal Date, Reversal Number, or Is Reversal in the criteria or results as needed. For more information on saved searches, see Defining a Saved Search.

Note:

Users with the Custom Transaction Forms permission can create a custom journal entry form with fields different from the standard journal entry form. See Creating Custom Entry and Transaction Forms.

To create a reversing journal entry:

Go to Transactions > Financial > Make Journal Entries.
In the Primary Information section:
1. In the Entry No. field, accept the default or enter a different number.
  
  Note:
  If journal entries are assigned autogenerated numbers in your account, you cannot change the default number unless the override permission is enabled for Journal. Go to Setup >Company > Auto-Generated Numbers > Document Numbers subtab. Check the Allow Override box on the Journal line. For more information, see Set Auto-Generated Numbers.
2. Review the Out of Balance By fields as you enter journal lines. They indicate whether the debits and credits in the journal entry balance.
3. If you use NetSuite OneWorld, in the Classification section, select a subsidiary to associate with this journal entry. You must select the subsidiary before you can accept or select the currency.
  
  The journal posts to this subsidiary and only entities associated with the subsidiary can view the entry.
  
  You cannot associate a regular journal entry with more than one subsidiary. For journal entries between two subsidiaries, make an intercompany journal entry. See Making Intercompany Journal Entries.
  
  Note:
  If the subsidiary you select is assigned to vendor or customer records, you can make journal entries for any of these vendors or customers. To do this, select the vendor or customer from the Name field. For more information about shared records, see Assigning Subsidiaries to a Vendor and Assigning Subsidiaries to a Customer.
4. If you use the Multiple Currencies feature, in the Primary Information section, accept the default Currency or select the currency used for all amounts in this journal entry.
  - If you use NetSuite OneWorld, the Currency field displays the base currency of the subsidiary selected in the Subsidiary field.
    
    For general journal entries, the currency defaults to the base currency of your company or root parent subsidiary. You can select any other currency available in your account.
    
    For intercompany journal entries in OneWorld, the currency defaults to the base currency of the selected subsidiary. However, it can be changed to the currency of the To Subsidiary.
  - If you do not use NetSuite OneWorld, the Currency field defaults to the base currency of the company.
5. The Exchange Rate field displays the default exchange rate of the selected subsidiary.
  
  For intercompany journal entries in OneWorld, this field displays the To Subsidiary's currency to the Subsidiary's currency. You can edit the exchange rate for this transaction only, or you can update the currency exchange rates list.
6. If you have journal approval permission, check the Approved box to approve your journal entry.
  
  If you do not check this box, this entry does not post until it is approved.
  
  Important:
  The Approved box displays only if the Require Approvals on Journal Entries preference is enabled. Go to Setup > Accounting > Accounting Preferences > General subtab. See Require Approvals on Journal Entries Preference.
  
  The Approved box does not display if you have enabled the Journal Entries approval routing preference to use SuiteFlow to create a custom journal entry approval routing. See Use Journal Entry Approval Routing.
7. In the Date field, accept today's date or enter a new date for the journal entry.
8. If you use fiscal periods, you see a Posting Period field.
  
  When you approve a journal entry, you can select a different Posting Period than the one initially displayed. You cannot select a closed period. You may be able to select an open and locked period if your role includes the Override Period Restrictions permission.
  
  The posting period is determined when the journal entry is approved. If approval occurs after the selected posting period has closed, the journal entry is posted in the period designated by the accounting preference Default Posting Period When Transaction Date in Closed Periods.
9. In the Reversal Date field, enter the date on which you want the reversing entry to be posted.
10. Check or clear the Defer Entry box using the following two options:
  - Check this box to make the reversal a memorized transaction that is automatically created on the reversal date.
    
    If you check the Defer Entry box, the Reversal Date field is mandatory.
  - Clear this box to immediately enter the reversal transaction with a transaction date that matches the date you entered in the Reversal Date field.
11. In the Memo field, enter information to help you identify this journal entry in a list of other journal entries.
  
  The value in the Memo field displays on the List page.
In the Classification section, if you have enabled Departments, Classes, or both and you classify at the transaction-level rather than the line-level, select the appropriate classification to associate with this journal entry.

For information about Departments and Classes, see Departments and Classes Overview.
On the Lines subtab, enter the detail information for the journal lines.

The columns that appear are based upon the permissions set for your user role.

Tip:
You can navigate down the lines by pressing the Enter key on your keyboard. You cannot navigate up the lines.
1. In the Account field, select the ledger account to be affected by this journal entry.
  
  The list of available accounts is filtered according to any class, department, and location restrictions set for your role. Accounts that are associated with classes, departments, and locations to which your role does not have access are not available in the Account list.
2. Enter the debit or credit amount for the line.
3. Select a tax code, if needed.
4. Optionally, enter a memo to help you recognize this entry in a register for this account.
5. Optionally, select a name of a person, vendor, project, or company to associate with this entry.
  
  If you use the Customers and Multiple Currencies feature, you can make journal entries in any currency used by an entity.
  
  Note:
  If the subsidiary you select is assigned to vendor or customer records, you can make journal entries for any of these vendors or customers. To do this, select the vendor or customer from the Name field. For more information about shared records, see Assigning Subsidiaries to a Vendor and Assigning Subsidiaries to a Customer.
6. If you have enabled Locations on the Company subtab of the Enable Features page and you specify classifications at the line-level, select the appropriate location to associate with this line.
  
  For information about Locations, see Locations Overview.
7. If you use the Revenue Recognition or Amortization features:
  1. In the Schedule column list, select the appropriate template.
    
    Revenue recognition templates display when the Revenue Recognition feature is enabled. Amortization templates display when the Amortization feature is enabled.
  2. If you select a variable template, you must also select the associated project in the Customer column list.
  3. Enter a start and end date, if needed.
  4. Enter the residual amount not to be recognized, if needed.
8. For OneWorld subsidiaries or accounts with value-added tax (VAT), enter the VAT amount, gross amount, and tax account, if needed.
9. Click Add.
  
  Tip:
  When line details are similar, click Copy Previous and then make modifications as required.
10. Repeat these steps for each line item.
On the Communication subtab, you can attach files and notes to this transaction.
1. On the User Notes subtab, enter a title and note for any comments you want to add to this transaction. Click Add after each note
2. On the Files subtab, select and attach files from the File Cabinet related to this transaction. To upload a new file to the File Cabinet, select New from the list in the Attach Files column.
3. Use the Events, Tasks, and Phone Calls subtabs to add to attach activities, such as events, phone calls, and tasks to this transaction. For more information, see Attaching Events, Tasks, and Calls to Records and Transactions.
If you use NetSuite OneWorld and the Multi-Book Accounting feature is provisioned in your account, the Accounting Books subtab appears. This subtab shows the secondary books associated with the selected check, if any, and their respective base currencies and exchange rates. For information about Multi-Book Accounting, see Using Multi-Book Accounting.
Click Save.

When you finish entering line items, verify that the Out of Balance by Debit and Credit fields are blank. If either field contains an amount, your line items are out of balance. Your line items must balance to save the journal.

To create a reversing journal entry:

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