> ## Documentation Index
> Fetch the complete documentation index at: https://cashflowy.ai/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Journal Entries

> Create double-entry bookkeeping journal entries for adjustments, transfers, and non-cash transactions.

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

<Info>
  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](/getting-started/book-a-bookkeeper).
</Info>

## How to create a Journal Entry

From a transaction:

* Go to **Banking → Transactions**
* Click the **+ Add Transaction** button at the top right

<Frame>
  <img src="https://mintcdn.com/cashflowyai/ZJo24k6CCi6dXLmV/images/image-21.png?fit=max&auto=format&n=ZJo24k6CCi6dXLmV&q=85&s=335e4fc17a852840f3f2a9075ae4981b" alt="Image" width="370" height="68" data-path="images/image-21.png" />
</Frame>

* Select **Add Journal Entry** from the dropdown

<Frame>
  <img src="https://mintcdn.com/cashflowyai/ZJo24k6CCi6dXLmV/images/image-22.png?fit=max&auto=format&n=ZJo24k6CCi6dXLmV&q=85&s=4eaff3e6e50930009dd27576a2156f26" alt="Image" width="330" height="68" data-path="images/image-22.png" />
</Frame>

* Enter the **Transaction Date** and **Journal Description** (required, up to 255 characters)
* For each line, select a **Bank Account** or **Category**, then enter either a **Debit** or **Credit** amount
* Click **+ Add Line** to add more rows as needed
* Confirm **Total Debits** equals **Total Credits** - the Save button stays disabled until balanced
  <Frame>
    <img src="https://mintcdn.com/cashflowyai/ZJo24k6CCi6dXLmV/images/image-24.png?fit=max&auto=format&n=ZJo24k6CCi6dXLmV&q=85&s=83ffd0a2f0d25c840447b26c60e7c4d6" alt="Image" width="2282" height="1524" data-path="images/image-24.png" />
  </Frame>
* Click **Save Entry**

## Example entries

<AccordionGroup>
  <Accordion title="Owner invests $10,000 into the business">
    | Account        | Debit    | Credit   |
    | -------------- | -------- | -------- |
    | Bank Account   | \$10,000 |          |
    | Owner's Equity |          | \$10,000 |
  </Accordion>

  <Accordion title="Record $200 monthly depreciation">
    | Account                  | Debit | Credit |
    | ------------------------ | ----- | ------ |
    | Depreciation Expense     | \$200 |        |
    | Accumulated Depreciation |       | \$200  |
  </Accordion>

  <Accordion title="Accrue $1,500 revenue not yet invoiced">
    | Account             | Debit   | Credit  |
    | ------------------- | ------- | ------- |
    | Accounts Receivable | \$1,500 |         |
    | Revenue             |         | \$1,500 |
  </Accordion>
</AccordionGroup>

<Warning>
  Every journal entry **must balance** - total debits must equal total credits. Cashflowy will prevent you from saving an unbalanced entry.
</Warning>