Debit, Credit, Payment Direction, and Ledger Reference
Debit, Credit, Payment Direction, and Ledger Reference
Overview
This guide will help you interpret debit/credit and money direction correctly across source transactions, payment accounts, party ledgers, and the general ledger.
You can distinguish receipt/payment direction from debit/credit presentation and avoid reversed entries.
Who can do this
You need access to Relevant transaction/report access; posting changes require accounting authority.
Before you start
Know the business event, account types, party role, whether money is received or paid, and set up mappings.
Where to find it
Open source transaction, Payment Account Statement, party ledger, Journal Ledger, and Account Ledger.
Debit, Credit, Payment Direction, and Ledger Reference
Step 1: Describe the business event without accounting labels
Step 2: Identify assets, liabilities, equity, income, expenses, party balances, and payment
Identify assets, liabilities, equity, income, expenses, party balances, and payment accounts affected.
Step 3: Confirm money direction separately from debit/credit wording
Step 4: Trace the source-generated journal
Step 5: Recalculate ledger running balances using their displayed convention
Step 6: Reconcile subledger and general-ledger controls
Check your work
Generated journals balance and source, party, payment-account, and general-ledger totals agree.
If something goes wrong
- Never change payment direction by editing labels or one journal side.
- Confirm each report's sign convention.
Related guides
- Trace a Source Transaction into the General Ledger
- Reconcile a Payment Account Statement
- Review an Account Ledger