In NV1, transactions are added directly to accounts and different views of the accounts provide information in a form normally associated with journals. In NewViews, transactions are added directly to journals. NewViews 2 provides appropriate journals for many specialized purposes. A general journal is provided for transactions that do not fit into categories covered by other journals.
Traditionally in accounting, transactions are recorded on journals and then at a later time are posted to account ledgers. For this reason journals are often called books of original entry and account ledgers are called books of final entry. In NV1, the use of journals is optional; in fact, transactions are added directly to account ledgers. In NewViews the use of journals is required for all transactions. The main purposes of journals are to concentrate data entry for a particular type of transaction in one place. The entries however do not have to be posted directly on a Journal. You may enter transactions directly on account ledgers as long as a journal is preset or selected.
In a real-time multi-user environment it is desirable to see all Sales Orders or Sales Invoices together. The Sales journal has a collection of sub-journals. When positioned on the Sales Journal, the parent of all Sales sub-journals, all sales and orders for an organization will be concentrated in one place. New sub-journals can be added for categorizing items, departments, or for security purposes. Journals will form an integral part of your bookkeeping method. In many cases, organizations or associations of professionals force very detailed and stringent bookkeeping procedures on their members, specifically including the use of journals. For example, it is especially useful for concentrating adjusting entries on a general journal. Otherwise, these transactions would be spread out over a number of accounts. A general journal is also used for the entry of opening balances in a new set of books.
In NV1, accounts can be used as journals, and since you can have any number of accounts, you can have any number of journals. In NewViews, there is a group of built-in journals; these include Bank, General, Payroll, Purchase and Sales. Each of these journals has a collection of sub-journals for more specific tasks. The Bank journal has sub-journals for Deposits and Payments. Items are added to journals in the same way they are added to accounts. To record a simple transaction two items are added: one to debit a cross-account, and another to credit a cross-account. Similarly, complex transactions can be added to debit and credit any number of cross-accounts.
Journals still behave like accounts and can be edited to correct errors or omissions, and changes can be controlled by the user settings on the system user option's table. Changes and deletions on journals are audited so NewViews provides a full audit trail, and cross-account fields always provide full cross-referencing between account ledgers and/or journal items.
Since journals are not accounts they do not have a normal balances. One new attribute that can be set on a journal is its partition Tag. Tags are used in NV2 to partition the database. The default partition Tag is financial. Other sample preset partition Tags are budget and order.
Journals are used to concentrate source documents in one place. Invoices, bills, orders, payroll checks and so on, are recorded as distributions on journals.
We use sales invoices to illustrate journals in NewViews. If data entry is not done on the sales journal directly, invoices can be added to customer receivable accounts. This is convenient since the receivables account ledger strongly resembles a customer statement and you can expand any item of interest to an invoice (distribution) for more detail. Although invoices are added to the customer ledger directly a journal must still be specified at the time of data entry. The sales journal will have all invoices entered for all customers.
Invoices are added as distributions to an invoice journal in exactly the same way they were added to a customer account. However, the additional task of picking the sales journal name is required when adding the invoice directly to the customer ledger. The description on the item should identify it as an invoice to distinguish it from other transactions on the customer's account, i.e. orders.
A customer account has the appearance of a statement whether invoices are added directly to the account or to an invoice journal. However, in NV2 whether invoices are added to a journal, or directly to the customer account the details are available in both locations. In NV1, when a journal was used the items representing invoices on the customer account are simple items.
In a traditional bookkeeping system, accounts are listed in a chart of accounts. Posting accounts appear either in a chart kept for the general ledger or in separate charts for subsidiary ledgers. Each subsidiary ledger totals to a controlling account in the general ledger chart of accounts.
So far we have made no mention of charts of accounts and, in fact, we have been adding new accounts under /NewViews/Account/types and optionally specifying which report they appear on. In NV2, accounts can appear in one or two locations. The account by default is created under /NewViews/Accounts/types. The account will also appear on the report specified on the Account/Setup > Report column. The postings to the account can be added, edited or deleted in both locations. This provides the ability to expand accounts to view transaction details as you browse through your database.
However, you can add a report to the /NewViews/Report branch for a chart of accounts. Each posting account that would otherwise appear on the balance sheet or income statement is instead added to the chart and totaled to the financial reports. Controlling accounts are added to the chart for each subsidiary ledger. The chart of accounts can be organized by account type such as assets, liabilities, revenue and so on, and although not necessary in NewViews, the chart can be used for a trial balance. In effect, all posting accounts appear in a chart and financial reports use report arithmetic to draw information from these accounts.
NV2 accounts have a new attribute called Normal Representation. It is now possible to have more than one date range on a single report. The top group of accounts (typically assets & liabilities) on the Trial Balance can be set to perpetual. The bottom group of accounts (revenue & expenses) can be set to periodic. If an Opening Retained Earnings account is added to the report with its normal representation set to opening a traditional Trial Balance can be setup.
Throughout this manual, transactions are added directly to journals or accounts and accounts can be added directly to reports. However, this chapter emphasizes that NewViews is flexible enough to provide a variety of approaches to bookkeeping. It includes the traditional approach of journals and charts of accounts and the direct method of posting to the books of final entry.