One of the positions you usually assume as a small business owner is that of a bookkeeper or accountant. Part of the work entails keeping a journal. Journal entries are a record of all of your company transactions if you’re familiar with accounting terminology. They are the first and perhaps most significant phase in the accounting cycle, as they reflect all of the financial activities that will impact your company. It’s critical to understand how to make a proper journal entry or general entry for your business.
Accounting journal entries often use the double-entry accounting form, with a debit and a credit entry for each journal entry. Always provide a date and a description of the transaction in your journal entries. When entering journal entries manually, accountants and bookkeepers usually assign a unique number to each one. If using accounting software, the programme can give a number to each one automatically.
How to do a journal entry in QuickBooks
The first step in creating journal entries for your company is to figure out what transactions need to be recorded. If you use accounting software, the accounting software can handle the bulk of journal entries, leaving you with only month-end adjusting entries to enter, such as when reconciling your bank statements or entering accruals for payroll and other expenses.
As an example, consider the following. You go to your neighborhood office supply store and buy paper and pens for your business. The overall cost of the order is $75.00. Here’s how you’d go about writing your journal entry.
Step 1: Determine which accounts will be impacted
You must first decide which accounts in your general ledger will be impacted by your journal entry before you can write and publish it. The statements that will be affected in this case are your office supply account and your cash account.
Tips for spotting the correct accounts include:
Second, sort your transactions: Sorting your bank deposits, expenses, and sales transactions by transaction form would make recording your journal entries much simpler.
When determining the correct accounts, use common sense:
- Order your transactions first: Sorting your transactions by transaction form would make it much easier to log your journal entries if you have bank deposits, expenditures, or sales to make.
- When determining the correct accounts, use common sense: This procedure can seem overwhelming at first, but as you complete more journal entries, you’ll gain a better understanding of can accounts to use for your transactions.
Step 2: Determine the form of account you have: You’ll be making a cost for your office supplies account while lowering the amount of cash in your bank account if you spend $75 at the shop.
To each account, you’ll need to apply standard accounting principles. You will debit an expense account to increase it and credit it to reduce your cash account, which is advantageous.
Tips for determining the account form include:
- Keep the following account forms in mind: Assets, Liabilities, Expense, Revenue, and Capital/Owner Equity accounts are examples of account categories. Accounting journal entries must fall into one of these categories. The office supplies account, for example, is an expense, while the cash account is an asset.
- Determine which account is debited and which version is credited using traditional accounting rules: When you report the above transaction in the office supplies case, you will be raising your expenses because you bought office supplies, which is an expense account, and decreasing your savings because you bought those supplies with your cash account, which is an asset.
How to delete a journal entry in QuickBooks
If you made a mistake and created a journal entry, follow these measures to delete it permanently. Necessary: You must be confident that deleting the journal entry is essential. This can easily throw your accounts out of whack:
- After that, go to Settings and then Accounts ledger.
- Locate the account for which you made the journal entry. Then choose Account history from the drop-down menu.
- In the account register, look for the journal entry. In the Ref No. or Type column, the term “Journal” should appear.
- To extend the view, select the journal entry.
- Choose Delete.
- To confirm, select Yes.
How to adjust accounts payable in QuickBooks with a journal entry
Make a suitable entry in your journal
- Select Make General Journal Entries from the Company menu.
- Change the date and, if necessary, the entry number in the Make General Journal Entries window.
- Pick Accounts Payable from the dropdown list in the Account sector.
- Tab to the Name column, pick the vendor name from the dropdown list and then enter the Credit column number.
- Pick the offset account on the following line and type the balance in the Debit column.
- Choose Accounts Payable from the dropdown list in the Account sector.
- Tab to the Name column, pick the vendor name from the dropdown list and then enter the number in the Debit column.
- Pick the offset account on the following line and type the number in the Credit column.
- Save & Close is the option to choose.
Apply the journal entry to the debit/credit that already exists.
- Pick Pay Bills from the Vendors menu.
- Choose Set Credits after selecting the bill.
- Pick the available credit from the Credits tab and click Done.
- Save & Close is the option to choose.
To summarise, you should know how you can record a journal entry in the books in any accounting software. The blog’s whole idea is to help you understand the various aspects of recording, deleting ana adjusting the QuickBooks Desktop software’s journal entry. I hope that this blog helped you know it and was worth your time.