Discover UH Revenue 2 Why Do We Create Journal

Transcript:Discover UH Revenue 2 Why Do We Create Journal:
Discover UH Revenue 2 Why Do We Create Journal Entries? Journal entries are created to record the University’s business transactions. These transactions are posted to the general ledger. The general ledger records all account activity for the University (i.e. assets, liabilities, fund equity, revenues, and expenses). The transactions posted to the ledger are used to prepare the University’s financial statements. 3 What are Debits and Credits? Debits and Credits are often characterized as either a positive or negative number but in reality a debit or a credit characterizes the type of account being used. There are five types of accounts used in accounting. They each have either a debit or a credit balance, which is known as its normal balance. The normal balances for each account are as shown in the table to the right. To reduce the normal balance of the accounts listed a reversing debit or credit would be recorded. 4 What is Revenue? Revenue is income earned or received by the University. The University collects the following types of revenue: Sales of Goods and Services Contracts & Grants (federal, state, local, private) Gifts (current & endowed) Tuition & Fees State Appropriations Auxiliary Enterprise 5 Sales of Goods & Services Revenue is recorded when goods are sold and/or services rendered by a department Types of Sales Cash Sales Credit Card Sales Service Center Sales 6 Sales of Goods & Services Cash Sales Deposit to local bank Deposit sent to SFS GL Journal – Routed along WF Path 2 Credit Card Sales Deposit to credit card bank Deposit not sent to SFS (unless combined with cash deposit) GL Journal – Routed along WF Path 1 Note: Cash and Credit Card Sales can be combined on the same GL Journal, WF Path 2 is selected 7 Sales of Goods & Services Service Center Sales Prepared on SC Voucher (unless a cash sale occurs, GL Journal prepared) Recovered cost accounts are always used 50050 (local funds) 50051 (state funds) 50053 (cash sales) 8 Sales of Goods & Services Supporting Documentation Cash Deposit Summary Form (with two signatures) Deposit Slip Totals Report http://www.uh.edu/finance/pages/References.htm 9 Contract & Grant Revenue Revenue Estimate Budget is the total amount of funds to be received from the sponsoring agency. The revenue budget should be equal to your expense budget in order to create the appropriate REV actual entry. 10 Contract & Grant Revenue Revenue recorded to cover