Journal Entries – Best Practices

Updated 3-25-10

General Information:

A successful upload does not mean the journal has been posted. After it is uploaded it must be
reviewed prior to posting in the General Ledger (GL). Currently all manual Web ADI journals
are reviewed and posted to the GL daily by the Financial Reporting or the Accounting Services
staff (Reviewer). The reviewer is not reviewing the journal via the WebADI template but rather
through the Oracle GL; therefore, some information provided on the template is not readily
viewable and entry rows are re-sorted by the Natural Class value. (See Journal Template
Example)

All journal entries can be set up to post multiple debits to one credit or a single debit and
multiple credits – compound journal entries. Compound journal entries are especially helpful for
inter department charges and allocations from a single chart string to multiple chart strings.

Correcting Transactions:

If you discover an error on your journal, you should check to see if the entry has been posted to
the GL. If not, changes can be made to the data by the Reviewer prior to posting. Changes that
can be made include descriptions, chart strings, and amounts, or delete specific rows. Un posted
journals can also be deleted in entirety.

Posted journals can be reversed by the Reviewer by selecting the journal and clicking the reverse
button. The reversal entry is created by the system and then posted so there's no need to upload
another journal. The system names the journal to indicate it is a reversal and to include the
original name so the two journals can be easily matched for financial analysis.

Journal entries cannot be used to correct transactions posted to the GL by the following satellite
or Oracle subsystems (referred to as sources in the GL and IRA reports): Receivables, Payable,
Advance, Banner, Benesoft, Cashiering, CBORD, Computer Store, The Daily Dartmouth,
FAMIS, Inventory, OGA (“Projects”), Oracle Labor Distribution (“OLD”), Payroll, Telephone
Services (Pinnacle), Utilities Billing System, and Yardi. Please contact a representative for the
satellite or Oracle subsystems regarding what information they need to make the correction. (See
Correcting Transactions by Source).

Journal entries can be used to correct transactions from the Hanover Inn, PCard, Travel System,
and Resource25. Journal entries can also be used to correct transactions from a service/recharge
center (the Source name will always begin with “SRVCTR…”) but the natural class must remain
in the Service Center range (7811-7826). Service Center transactions can also be corrected by
the Service Center. Journal entries to correct a transaction should not be done until the original
transaction has posted.

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Pcard transactions should be reviewed and then allocated to the correct chart string using the
Pcard system. The Pcard holder should have a backup designated to perform this task if they are
out of the office. Once the Pcard system has posted to the GL, the only recourse for correction is
a journal entry. These journal entries should be the exception to the rule rather than the normal
means to allocate Pcard charges.

Correcting Chart Strings by Journal Entry (if allowed):

When crediting an expense natural class in order to “move” a charge to another chart string,
make sure the charge has been posted to the chart string being credited (including sub-activity).
The same holds true when debiting a revenue natural class. Make sure that the revenue has been
posted (credited) to the chart string being debited (including sub-activity).

Example Original entry in GL debit $583.21 in 20.538.368000.426103.0000.7433

Incorrect credit $724.45 to 20.538.368000.426103.0000.7433

(amount is greater than original entry)
or
credit $538.21 to 20.542.368000.493214.0000.7434
(incorrect org and natural class)

Correction credit $538.21 or less to 20.538.368000.426103.0000.7433

The Reviewer will look at the transactions in the chart string being credited when moving an
expense or the chart string being debited when moving revenue to see that the charge/revenue
was indeed posted to that chart string. When nothing is found to be moved or the entry is for
more than the chart string’s year to date balance, the entry will either be rejected or you will be
contacted for more information.

In order to determine whether to debit or credit a chart string when correcting a transaction, you
need to know the balance of the transaction being moved (corrected). Expenses are debit or
positive balances, whereas revenues are credit or negative balances. Therefore, in order to move
an expense, the string must be credited and to move revenue, the string must be debited.

A cash/credit card clearing natural class should be used when revenue, for example credit card
receipts, posts to one chart string but include several types of revenue. Journal entries debiting a
cash/credit card clearing chart string are considered reasonable, whereas many debits to revenue
natural classes are not (exceptions may be allowed).

Example, incorrect Credit card deposit credit $400 4673 Other Income
Journal entry debit $400 4673 Other Income
credit $150 4673 Fines and Fees
credit $250 4657 Program Revenue

Example, correct Credit card deposit credit $400 1091 Cash Clearing Credit Cards

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 Journal entry debit $400 1091 Cash Clearing Credit Cards
credit $150 4673 Fines and Fees
credit $250 4657 Program Revenue
WebADI:

Accounting Date – The default is the current date, but you can choose any date from any open
period. This is especially important at month end when two periods are open. During the first
three or four business days of each month you may post to either the current month or the
previous month. For example, if you want the journal you are uploading on August 2nd to post in
July, it must have a July date.

Batch Name and/or Journal Name – The batch name and journal name can be the same or
different as long as one contains your first initial, full last name, followed by unique description.
The first initial and full last name identifies the person uploading the journal entry in case that
person needs to be contacted about their entry. The unique description provides a unique
identifier for each journal on reports.
Examples S Munnro SC Billing 8-23
D Pirel correct FY07

Journal Description – For the reviewer, the description is the first key to understanding what the
entry is doing in order to determine if the entry should be posted or not. It provides the
information needed to determine if the entry is backwards, a prior year adjustment, or a reversal.
If the entry is appropriate based on the description, it will be posted. If not, it will be rejected or
further information will be requested, which all takes time. If you do not provide a description,
one will be added for you by the system. This description, Journal Import followed by a number,
is not meaningful to the Reviewer or readers of reports; therefore, a unique journal description is
required.
Examples Correct FY07 meal charges
Write off uncollectible receivable

When submitting a revised journal, due to an entry being rejected during the review process,
include in the journal description “Rejected JE resubmit” followed by the journal description
information.
Example Rejected JE resubmit refund overchg

Journal Amounts – No line should include a zero amount or a negative amount in either the debit
or credit columns.

Journal Line Descriptions – If you do not provide a description, one will be added by the system.
This description, Journal Import Created, is not meaningful to the reviewer nor does it add
helpful information to reports; therefore, journal line descriptions are required. They can be
individually unique or the same on all lines. This information appears on the journal review
screen and is used by the reviewer to determine appropriateness of the entry; therefore unique
information about each line should be included here rather than as Additional Line Info.
Examples Prof Rivars Aug
FY08 program funding

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Additional Line Info – This information is not readily viewable by the reviewer and the system
does not add information here if left blank; therefore, this information is not required (is required
when using Transfer Natural Class Values). This information, however, can be viewed on
reports, so it may be beneficial for the reader of a report to have this additional information.
(This field could be used for the offset chart string, ie where the transaction is being moved
to/from).

Successful Upload – You should always note the number of rows being uploaded and verify that
number with the “xxx rows successfully uploaded” message you receive. This is extremely
important for large entries where every row of the journal is not viewable on one screen and
therefore the green smiley faces cannot be readily seen for all rows. This will ensure that ALL
rows were uploaded successfully. We have discovered a few instances where rows inserted at
the end of an entry were not included in the upload probably due to a formatting change.

Inter Department Transactions: There are two types of inter department transactions: (1)
inter department services should use internal revenue and expense natural classes (see Internal
Revenue and Expense Natural Class Use) and (2) departments sharing costs or one department
assisting with the funding of another department’s costs have the option of either splitting the
PO/invoice into two or more chart strings or recording a transfer using transfer natural classes.
Generally, sharing costs by crediting an expense natural class is not allowed.

Inter department transactions (transactions between entity values < 40) occur any time one
department charges another for services provided. Some examples would be use of one
department’s photocopier by another department, a rental of a meeting room at the Skiway,
printing services provided by DPMS, meals/rooms provided by the Hanover Inn, and Vox car
rentals. The provider of the service (ie. the department recording the inter department revenue)
determines the correct natural classes to use and submits the journal entry. Inter department
revenue and inter department expense must net to $-0-. These are internal transactions which
must be accounted for separately from the College’s “real” (external) revenue and expenses.

There are three categories of inter department revenue/expense natural classes. Service and
Recharge Centers must calculate rates to charge for their services, submit this rate documentation
to the Controller’s Office annually, and record revenue and expense in natural class ranges 4811-
4825 and 7811-7825, respectively. All other departments must use inter department natural
classes, 4851- 4883 (revenue) and 7851-7883 (expense).

When recording an inter department transaction, inter department revenue must equal inter
department expense. Inter department revenues are in the 48xx natural class range and inter
department expenses are in the 78xx natural class range. There is a direct relationship between
the revenue and expense natural classes for each type of service.
Example – debit 4862, credit 7862.

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Transactions posted to inter department expense natural classes cannot be moved to external
expense natural classes.

Example of an unallowed journal entry debit 8151 Non Travel Meals Local
credit 7857 Inter Dept Meals Beverages

Inter department expense can be credited if the debit is to another inter department expense
natural class, but there must be an inter department expense recorded in the chart string being
credited. There must be sufficient reason to make a correction since it is the provider of the
service who determines what expense natural class to use.

Example Original entry in GL debit 7869 Inter Dept Services

Correction debit 7864 Inter Dept Waste Removal
credit 7869 Inter Dept Services

Transfers:

Transfers are the means for departments to provide general support to other departments. This
support has nothing to do with providing services (use inter department natural classes) or
splitting of specific costs (split the invoice using expense natural classes). Transfer natural
classes are based on funding or activity values. The chart string providing the funding is debited
and the chart string receiving the funding is credited. To determine what transfer natural class to
use, refer to the Transfer Natural Class Chart (Transfer Matrix).

Transfers to a restricted funding source (535000-784699) from any other funding source is only
allowed if it is agreed that a portion of a specific cost will be funded by the unrestricted funding.
The WebADI journal template and documentation of the agreement (as a separate tab in the
WebADI template or separately) must be sent to the Reviewers after uploading the journal so
they can determine if the entry should be posted or not. Transfers out of RFM (Restricted Funds
Management) category level 4 are not allowed.

Entries to Balance Sheet Natural Classes:

The balance sheet funding value - 909000 – must be used in combination with the following
types of balance sheet natural classes (assets and liabilities)(1000-2999): cash, cash on hand,
petty cash, clearing chart strings, revenue receivables, allowance for doubtful accounts, prepaid
expense, inventory, deferred charges, investments (purchase of and realized gains/losses),
auxiliary capitalized fixed assets, auxiliary accumulated depreciation, deferred revenue, accounts
payable, and other short-term liabilities.

The following types of balance sheet natural classes (assets and liabilities) are not used in
combination with the balance sheet funding value 909000: notes and loans receivable, internal
loans receivable/payable, non-Auxiliary capitalized fixed assets, non-Auxiliary accumulated

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depreciation, gifts in kind, real estate for sale, long-term liabilities, and bonds/notes payable. For
these balance sheet natural classes, use the same funding value as the offset chart string.

The balance sheet activity value - 910000 - is used with the following balance sheet natural
classes (assets and liabilities) when the Institutional entity 001 is used: cash, accounts payable,
cash advances, fringe pool.