Splitting Transactions: Generated Transactions

Suppose that you classify all your expenses by department by using a dedicated subaccount segment for each department code. By mistake, you have posted all your expenses to one subaccount: 000-OPS. This means that the amount has been posted to the Expense subaccount of one department (Operations) instead of three different departments:

  • Operations, which is represented by OPS in the second subaccount segment
  • Financial, which is represented by FIN in the second subaccount segment
  • Purchasing, which is represented by PUR in the second subaccount segment

Now you need to split the incorrect journal entry by creating a correcting transaction, so that the total amount will be split to the subaccounts of three departments in the following proportions: 40% to the subaccount of the Financial department (000-FIN), 20% to the subaccount of the Purchasing department (000-PUR), and the remaining 40% in the subaccount of the Operations department (000-OPS).

The following table shows the journal entries of the original GL transaction of the Normal type.
Account Subaccount Debit Credit
Accounts Payable account 000-000 00.00 Amount
Expense account 000-OPS Amount 00.00
The following table shows the lines of the correcting GL transaction of the Reclassification type.
Account Subaccount Debit Credit
Expense account 000-OPS 00.00 0.4 * Amount
Expense account 000-FIN 0.4 * Amount 00.00
Expense account 000-OPS 00.00 0.2 * Amount
Expense account 000-PUR 0.2 * Amount 00.00

As a result, if $100 had been originally posted to the Expense subaccount of the Operations department, $40 will be posted to the Expense subaccount of the Financial department, $20 will be posted to the Expense subaccount of the Purchasing department, and $40 remains posted to the subaccount of the Operations department.