New Jersey Administrative Code
Title 5 - COMMUNITY AFFAIRS
Chapter 30 - LOCAL FINANCE BOARD
Subchapter 5 - CERTIFICATIONS OF AVAILABILITY OF FUNDS, AND ACCOUNTING SYSTEM REQUIREMENTS FOR LOCAL UNITS
Section 5:30-5.7 - General ledger accounting systems

Universal Citation: NJ Admin Code 5:30-5.7

Current through Register Vol. 56, No. 18, September 16, 2024

(a) All local units shall have and maintain a general ledger for the current fund and all other funds.

(b) The general ledger shall be the official permanent financial record of the local unit. It shall provide a summary of all financial transactions as they have been recorded in the books of original entry, using a double entry, self-balancing accounting system with the general ledger facilitating the preparation of the financial statements. The general ledger, together with the books of original entry and supporting subsidiary ledgers shall constitute the complete accounting system.

(c) In support of the general ledger, the following books of original entry (journals) are required to be maintained in an electronic format:

1. Cash receipts journal;

2. Cash disbursements journal;

3. Payroll journal; and

4. General journal.

(d) The cash receipts journal shall be used to record all transactions where cash is received by the local unit; either for revenue or non-revenue (reimbursement of expenditures).

(e) The cash disbursements journal shall be used to record all transactions where cash is disbursed by the local unit for any purpose such as: budget appropriations, grant expenditures, capital ordinances, trust funds, or payroll.

(f) The payroll journal shall be used to record the details of each payroll for each employee indicating the pay period, employee's name, hours worked, rate of pay, overtime, and payroll deductions.

(g) The general journal shall be used to record any transactions that cannot be recorded in any other journals. Examples of journal entries in the general journal include:

1. Opening accounts at the beginning of the accounting period;

2. Recording temporary and adopted budgets;

3. Closing budgetary and operating accounts at the end of the accounting period;

4. Recording adjusted entries or corrections to previously recorded transactions;

5. Recording non-cash budgetary transactions such as:
i. Charging deferred charges to appropriations;

ii. Charging surplus to realized revenue;

iii. Charging State and Federal grants;

iv. Charging reserves for uncollected taxes to appropriations; and

v. Recording non-municipal tax levies;

6. Recording the adoption of bond ordinances; and

7. Recording grant awards.

(h) The general ledger is the final record in which a financial transaction is recorded. An accounting transaction is not to be considered completed, unless it is:

1. Documented and supportable;

2. Recorded in the applicable book of original entry; and

3. Posted from the book of original entry to the affected general ledger accounts.

(i) At the beginning of the local unit's fiscal year, before any current period transactions are recorded, the general ledger accounts shall reflect opening balances in assets, liability, reserves, and fund balance only. All books of original entry shall be closed at the end of each accounting period by totaling the recorded transactions and posting the totals to the general ledger. Totals for all funds shall be posted to the general ledger on at least a monthly basis.

(j) General ledger accounts shall reflect the following normal balances at the end of each accounting period:

1. Balance sheet accounts, as follows:
i. Assets-debit balances;

ii. Liabilities-credit balances;

iii. Reserves-credit balances; and

iv. Fund balance-credit balances; and

2. Budgetary and operating accounts, as follows:
i. Anticipated revenues-debit balances;

ii. Appropriations-credit balances;

iii. Revenues-credit balances;

iv. Expenditures-debit balances; and

v. Encumbrances-debit balances.

Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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