When you post a nominal journal, it is possible to post the balance to a contra account by selecting the Post Balance to Contra Account option which can be found on the Save Options screen which opens when you click on the Save button on the journal.
The Post Balance to Contra field is automatically pre-populated with the default bank account for the transaction of the currency.
When you enter a Cash Book Receipt or Payment, the system automatically display the selected bank or petty cash account in the Contra Account field.
Where the journal is a VAT journal, the option is always set to on as default and the default bank account is populated as default.
When the option is on, then a single detail line is posted to the nominal account selected as the contra account for the balance of the journal detail lines.
You can also select to post the balance of the journal to multiple contra entries by selecting the Post Multiple Contra Entries on the Save Options screen, in which case a separate detail line is posted for each detail line of the journal.
Example of Post Balance to Contra Account option:
Detail line 1: Debit £40,50.
Detail line 2: Debit £13.25.
Detail line 3: Credit £20.00.
Total value of the journal = 33.75.
A single credit detail line is posted to the contra account you have selected for the value of £33.75.
Example of Post Multiple Contra Entries option:
Detail line 1: Debit £40,50.
Detail line 2: Debit £13.25.
Detail line 3: Credit £20.00.
Total value of the journal = 33.75.
The selected contra account is updated with 3 separate detail lines, a credit for each of the two debit lines and a debit for the credit detail line.
Credit £40.50.
Credit £13.25.
Debit £20.00