 |
This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)
|
Ajournal entry is the act of keeping or making records of any transactions either economic or non-economic.
Transactions are listed in an accounting journal that shows a company's debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit. The total of the debits must equal the total of the credits, or the journal entry is considered unbalanced.
Journal entries can record unique items or recurring items such as depreciation or bond amortization. In accounting software, journal entries are usually entered using a separate module from accounts payable, which typically has its own subledger, that indirectly affects the general ledger. As a result, journal entries directly change the account balances on the general ledger. A properly documented journal entry consists of the correct date, amount(s) that will be debited, amount that will be credited, narration of the transaction, and unique reference number (i.e. check number).[1]
In a real business, recording transactions and recurring items involves practical application of accounting principles. For instance, if ABC Company sells a laptop for $300 in cash, the journal entry would be a debit to the Cash account for $300 and a credit to the Sales account for $300. This follows the rule that an increase in assets (cash) is debited, and revenue from sales is credited.
In order to record journal entries, one needs to have knowledge about-:
 |
This section may be confusing or unclear to readers. Please help clarify the section. There might be a discussion about this on the talk page. (November 2022) (Learn how and when to remove this message)
|
There are three types of accounts in accounting:
There are also subtypes of personal account:
