Definition
A journal entry is a dated accounting record of a transaction, made up of debit and credit lines to specific accounts that must add up to the same total.
What is a journal entry made of?
Every transaction in double-entry bookkeeping is recorded as a journal entry with a date, a description and at least two lines. Some entries are created automatically by documents such as invoices and receipts; others, such as accruals or corrections, are entered by an accountant.
A customer pays an invoice by bank transfer
Example- Dr Bank
- GBP 5,250
- Cr Accounts receivable
- GBP 5,250
Debits equal credits
GBP 5,250
Once posted, an entry shouldn’t be edited; it should be cancelled with a reversing entry and replaced, so the trail stays intact.