Journal Entries
Journal entries are the foundation of double-entry bookkeeping. Each entry has at least two lines — a debit and a credit — that must balance.When to use journal entries
- Depreciation — recording asset depreciation over time
- Accruals — recognizing revenue or expenses before cash changes hands
- Owner equity — recording owner contributions or draws
- Adjusting entries — month-end or year-end corrections
- Inter-account transfers — moving money between accounts in your chart of accounts
For most day-to-day transactions, you won’t need journal entries. They’re primarily for accounting adjustments. If you’re not sure, book a call with a bookkeeper.
How to create a journal entry
You can create journal entries in two ways: From a transaction:- Open any transaction in Banking → Transactions
- Click Add Journal Entry in the actions
- Fill in the debit and credit lines
- Go to the Journal Ledger page
- Click New Entry
- Set the date, description, and add debit/credit lines
Example entries
Owner invests $10,000 into the business
Owner invests $10,000 into the business
| Account | Debit | Credit |
|---|---|---|
| Bank Account | $10,000 | |
| Owner’s Equity | $10,000 |
Record $200 monthly depreciation
Record $200 monthly depreciation
| Account | Debit | Credit |
|---|---|---|
| Depreciation Expense | $200 | |
| Accumulated Depreciation | $200 |
Accrue $1,500 revenue not yet invoiced
Accrue $1,500 revenue not yet invoiced
| Account | Debit | Credit |
|---|---|---|
| Accounts Receivable | $1,500 | |
| Revenue | $1,500 |