All transactions that take place in Odoo create Journal Entries that either credit or debit a specific account. Each journal entry must balance. This means that the debits must equal the credits. Odoo makes it very easy to examine your Journal Entries so that you can see exactly where each transaction is posted.
To view the Journal Entries, go to the Invoicing menu and, under the Adviser submenu, click Journal Entries. By default, Odoo applies a filter restricting the journal entries to only Miscellaneous Operations. Clear this filter to see all the journal entries:
In the preceding screenshot of the listing, you can see two journal entries.
You can see that in the journal listing, you get a summary including the amount and the status indicating whether the journal entry is posted or unposted. You can also see that, in the invoice journal entry, we have a reference provided to the original sales order.
Note that the journal entry summary does not contain any references to specific accounts in Accounting and Finance. To see these details, we must click on a specific journal entry. Click on the invoice for $18.98 assigned to our customer/partner Mike Smith.
You will now see the details of the transaction and each account that was involved:
When we open the account, we see all the postings to the specific accounts that were involved. In the first row, we can see that Accounts Receivable was debited $18.98 for the invoiced T-shirt order. Next, in the second row, Odoo has posted a credit of $2.48 sales tax on the order. This goes into 111200 Tax Received. Finally, in the third row, we see that a $16.50 credit was posted to 200000 Product Sales for the T-shirts themselves. Note how the Debit column matches the Credit column. Debits and credits must always be equal in a journal entry.
More details of the transaction are displayed under each item. Click on the first posting to 101200 Account Receivable to pull up more details on that posting:
In the preceding screenshot, you can use the links to quickly find the partner, account, journal, and journal entry related to the posting.
If this is still a little confusing, don't worry. We are now going to go through a set of transactions from the Accounts Receivable side so that you can better understand how Odoo handles accounting transactions.