Dictionary / Journal Entry
What does Journal Entry mean in accounting?
Quick definition
GeneralRecording of a business transaction. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Personal Amex paid the booth
You run a bicycle shop. On May 13 you pay a velodrome $1,085 from your personal Amex for a weekend booth at the spring bike fair, and there is no vendor bill in QuickBooks and no business-bank line. In QuickBooks Online open Journal entry (in Xero, Manual journal) dated May 13: debit Marketing $1,085, credit Owner's equity) $1,085, so debits equal credits on that one recording. You will see Marketing on the May P&L and the equity line on the balance sheet. Do not enter a bill to the velodrome; you already paid it, so accounts payable would sit open with nothing to pay.
Radio spots belong on an invoice
You run a voice studio. On December 9 you finish a 12-spot radio package for a radio station and send them a $2,715 invoice. Create an Invoice in QuickBooks Online or Xero dated December 9: accounts receivable $2,715, Voice-over income $2,715. That invoice is the recording of the sale; do not also post a Journal entry debiting AR and crediting income. A journal skips the customer invoice, so you cannot apply their later payment to an open invoice and the AR aging stays blank.
Why it matters
A journal entry is one recording of a transaction: the debit and credit lines that must balance before they post. The journal is the chronological book those recordings sit in; the general journal is the catch-all book for items that do not belong in a sales, cash, or purchases journal. You will not post a journal entry for most daily bills and invoices, but you will post one when something has no bill, invoice, or clean bank-feed match, including owner activity, a reclass, or an adjusting entry at close. Treat a vendor purchase or a customer sale as a journal entry instead of a bill or invoice and accounts payable or accounts receivable never sees it; leave debits unequal to credits and the software will not post.
Further reading
Compare this term with reference material from other accounting and finance websites.
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What is Journal Entry in bookkeeping?
Recording of a business transaction.
When should I use Journal Entry?
Use Journal Entry when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Journal Entry?
Journal Entry is used for journal entry entries, while Joint Tenant covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.