Journal entry examples: how to write an entry, with solved cases

What a journal entry is

A journal entry records one movement of the business in the journal book: the date, a short description, and at least one account debited and one credited for the same total. Every entry starts from a document, so anyone can later check where the figure came from.

The rules of debit and credit

• Assets and expenses grow with a debit and shrink with a credit.
• Liabilities, equity and income grow with a credit and shrink with a debit.
• In every entry the debits add up to the same amount as the credits.

How to write an entry in three questions

1. What happened, and which document proves it?
2. Which accounts change, and does each one grow or shrink?
3. Which side does each change go on, by the rules above?

Seven solved examples

The first six are a shop's first month; the seventh corrects a mistake.

In example 1 the business gains cash (an asset grows: debit) and owes it to its owner (equity grows: credit). In example 4 nothing has been paid yet: what grows is what the client owes, an account receivable. In example 6 the expense is recorded when the bill arrives, not when it is paid.

How to correct an entry: the reversal

A recorded entry is not erased. If the rent had been recorded as 1,100 instead of 1,000, you record a reversal, the same entry with debit and credit swapped (example 7), and then the right entry. Both stay in the books, so anyone can see what changed and when.

The most common mistakes

• Debits and credits that do not add up to the same amount.
• The right amount on the wrong side, which doubles the error instead of cancelling it.
• A sale on credit recorded as cash, so the cash account shows money that never came in.
• The owner's personal spending mixed with the business's.

Entries that always balance

In Aconta Online you say what happened and how much: a sale, an expense, money the owner puts in, a deposit. It writes both sides of the entry and refuses anything that does not balance; you can also write the entry line by line. A recorded entry is never edited, so corrections are always reversals, with the trail in view.