Guide Categories
Journal Entries
Record manual accounting transactions and adjustments using double-entry bookkeeping principles.
Overview
Journal entries are the foundation of double-entry bookkeeping, allowing you to record transactions that don't fit into standard transaction types. They provide flexibility for adjustments, corrections, and complex accounting entries.
Note
Every journal entry must have balanced debits and credits. The total debit amounts must equal the total credit amounts.
Creating a Journal Entry
To create a new journal entry:
- Navigate to the Journal Entries tab
- Click New Journal Entry
- Enter the entry date and reference
- Add a description explaining the entry
- Add debit and credit lines to accounts
- Ensure debits equal credits
- Save the journal entry
Common Journal Entry Types
Adjusting Entries
End-of-period adjustments for accruals, deferrals, and corrections
Depreciation
Recording depreciation expense for fixed assets
Accruals
Recording expenses or income that have been incurred but not yet recorded
Reclassifications
Moving amounts between accounts for proper classification
Key Information Fields
| Field | Description |
|---|---|
| Date | Transaction date for the journal entry |
| Reference | Reference number for tracking purposes |
| Description | Explanation of the journal entry purpose |
| Account | Chart of accounts entries being affected |
| Debit | Debit amounts for each account |
| Credit | Credit amounts for each account |
Double-Entry Principles
Understanding basic accounting equation:
- Assets = Liabilities + Equity
- Debits increase assets and expenses, decrease liabilities and equity
- Credits decrease assets and expenses, increase liabilities and equity
- Every transaction affects at least two accounts
- Total debits must always equal total credits
Best Practices
- Always include clear, detailed descriptions
- Use consistent reference numbering systems
- Double-check that debits equal credits before saving
- Keep supporting documentation for all entries
- Review entries regularly for accuracy
- Implement approval processes for significant adjustments
- Consider the impact on financial statements
Warning
Incorrect journal entries can significantly impact your financial statements. Always verify the accounting treatment and amounts before saving.