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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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14–8. Restrict Use of Journal Entries

Many general ledger accountants spend a large part of their time researching why journal entries have been made. This is an especially galling problem if journal entries were made by someone else, because there may be no record of why they were entered or even of who made the entry. Also, if the computer system has a “drill-down” capability for researching general ledger information in detail (see the “Create General Ledger Drill-Down Capability” section later in this chapter), an information search may end at the journal entry, with no explanation for why the entry was made. This is an uncomfortable state of affairs for a general ledger accountant, who must report back to anyone requesting information from the general ledger saying that he or she does not know the nature of an account balance. Besides being embarrassing, it also takes time to research.

An easy solution is to totally restrict the use of journal entries to the general ledger accountant. By doing so, this person can research each request for a journal entry to verify that it is valid, make sure that the correct accounts are debited and credited, and include a description with the journal entry. This approach virtually eliminates all stray or undocumented journal entries from the system. Though it should not cause any problems, it may be difficult to implement if the computer system does not allow the journal entry feature to be restricted to one person—this depends on the type ...

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