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Understanding Journal Entries

Transactions in accounting are called entries . These entries are recorded in a process called journaling . For purposes of describing journaling , we are going to use a General Journal . The columns in a general journal might be Date , Account Name , Post Reference , Debit and Credit (Ross , Gilbertson , Lehman Hanson , chap 4 , 2003

The first step would be to put the date of the journal entry . For this , we would simply input the date . Next , we would write the account name . For our sample , we will use Music Unlimited . The Reference

br post would be the invoice number for this particular entry . Then finally , we would determine if we were entering a debit or a credit . A debit , of course , comes from our balance . A Credit is added to our balance

In a large corporation , you might have a separate journal for each company you deal with . Smaller companies might use a single journal for all their Debits and Credits

The following sample is a simple general journal entry . Included is the sign , which , in actual practice , would be omitted . A negative balance would use ) on each end of the dollar amount

Each transaction entry requires a source document . In this case , it would have been the Invoice . Entries are done in chronological as well (Ross , et al , chap 4 Date Account Reference Debit Credit

11 /05 /02 Music Unlimited 75 .00 Reference

Ross , Gilbertson , Lehman Hanson (2003 ) Century 21 Accounting General Journal , 7th

Edition . Journals , Entries , Source Documents and Recording Entries in a Journal...