Steps and Sample to Completing a Journal Entry

Knowing how to complete journal entries is the first step to proper business accounting. It is important to enter each item correctly to get an accurate picture of a company’s financial health. Improper recording of journal entries can lead to inaccurate profit and loss statements and wreak havoc during tax time.

General Journal Entry Steps

This is where a business logs all its day to day activities. All items must be recorded in chronological order. The following is the types of data entered in a general journal:

Step 1 Enter the transaction date.

Step 2 Enter debits and credits in their appropriate column.

Step 3 Enter a description of each transaction.

General Ledger Entry Steps

Step 5 The general ledger divides each general journal entry into different types of accounts. You must determine what account each of the journal entry belongs in and place it in the appropriate column.

• Liabilities


• Assets


• Revenue


• Expenses


• Equity

Purpose of Journal Entries

Proper journal entries make it so much easier to keep track of business expenditures and profits. During tax time everything you need it at your fingertip. Click on the link to Accounting Learning Resources for a sample of how to correctly complete journal entries.