what is a journal entry

A journal entry is a record of a business transaction in the accounting records of a business. It is used to track the movement of money in and out of a business, as well as to document changes in the value of assets and liabilities. In double-entry bookkeeping, at least two journal entries are made for every transaction. The structure of a journal entry contains the following elements: the entry date and reference number, a column showing what accounts are affected (revenue, expense, liability, asset, equity), columns for the debit and credit amounts, and a footer line with a brief description of the reason for the entry. A properly documented journal entry consists of the correct date, amount(s) that will be debited, amount that will be credited, narration of the transaction, and unique reference number. Journal entries can record unique items or recurring items such as depreciation or bond amortization. There are various types of journal entries to meet business needs, such as adjusting journal entries, which are used to accrue or defer revenue and expenses, change or correct previous entries, or estimate non-cash transactions. Journal entries are usually entered using a separate module from accounts payable, which typically has its own subledger that indirectly affects the general ledger.