What is journal entry?
A journal entry is a record of the financial transactions of a business in its general ledger or accounting journal. It typically includes the date of the transaction, the accounts affected, and the amounts debited and credited.
A journal entry is a method of recording a business transaction. In general, one account is debited and the corresponding account is credited for bookkeeping. A short memo or description is added while recording a journal entry.
For example, if Mr. ABC spends $10,000 on goods, then the journal entry for the same will be as follows:
Purchase Dr. $10000
To Bank Cr. $10000
When you enter expenses or invoices into the system, the cloud accounting software automatically posts the journal entries to the corresponding accounts. It also provides the feature of recurring journal entries for repetitive transactions like depreciation or interest. Journal entries play a crucial role in the reporting of business transactions.
Did you know?
Quickbooks, Zoho Books, Xero, and Sage all support recurring journal entries, which eliminates the need to adjust accounts for depreciation or interest payments on a frequent basis. Nimblefincorp can help you in creating a recurring journal in cloud software.
You can even get free consulting. Try it out right now.