Simple tips to Record a Journal Entry in QuickBooks
Steps to make a QuickBooks Journal Entry in 5 Steps
Navigate to the journal entry feature in QuickBooks.
Fill in the date and journal number.
Enter the correct accounts within the “Category” column.
Enter the debit and credit amounts until the entry is balanced.
Add a description and save.
Managing your business’s accounting can be complicated—even with all the assistance of accounting software like QuickBooks. This being said, even though you outsource your bookkeeping or accounting, it’s often helpful to know how some basic features work. If you’re using QuickBooks Online, you may be unclear on the best way to make a journal entry. A journal entry, as a reminder, is a transaction that’s entered directly to your business’s general ledger. So—how do you realy make a QuickBooks journal entry?
We’re here to break it down. We’ll show you the five simple steps it is possible to follow to record a journal entry in QuickBooks Online and get a leg up on managing your accounting processes.
What Is a QuickBooks Journal Entry?
First, let’s clarify exactly what a QuickBooks journal entry is. Generally, QuickBooks will automatically record transactions as they occur—you’ll record an invoice, sales receipt, bill, check, etc.—and QuickBooks will pull this data into the general ledger.
However, if you ever need to enter a transaction manually, like to correct an error, for instance, you’ll want to make use of the journal entry feature within QuickBooks Online. Whenever you post a journal entry in QuickBooks, or in any kind of accounting software, it should balance—any debit you make must have a corresponding credit and vice versa.
For instance, as you’ll see below, if you’re recording a journal entry for a check you wrote for a year’s worth of insurance, you’ll need certainly to list a debit into the insurance account and a credit to your bank checking account.
Simple tips to Record a QuickBooks Journal Entry
With the basics in mind, let’s break down exactly simple tips to record a journal entry in QuickBooks.
Once we mentioned, we’ll be using “prepaid insurance” in this example.
Step 1: Navigate to your journal entry feature.
The initial step is simple—you’ll need to navigate to the portion of your QuickBooks Online software which allows one to post journal entries. If you click the + icon at the top right of your file, you’ll see a dropdown menu called “Create” that lists “Journal Entry” into the farthest column regarding the right-hand side. For more information about
Record A Journal Entry In QuickBooks, please get in touch with us.
Once you’ve clicked “Journal Entry” you’ll navigate to your entry itself to fill in the required information.
quickbooks journal entry
Step 2: fill out the date and journal number.
As you possibly can see below, the journal entry form in QuickBooks on the internet is quite simple. When you’ve brought up this form, you’ll like to first edit the journal date. QuickBooks will automatically pull in the current date, so if you’re recording a journal entry from a previous month or day, you’ll want to be sure to go into the correct date.
Next, you’ll want to fill within the journal number. In this example, the journal number is 151—QuickBooks will automatically number any new journal entries sequentially following this number (this means that, the next you would be 152).
Step 3: go into the correct accounts in the “Category” column.
In this example, we’re creating a journal entry for prepaid rental insurance. Because rental insurance can be prepaid for per month or per year, it is considered an “other current asset” to begin, but needs to be expensed out whilst the year continues on, monthly. This being said, you can book the prepaid asset using a check, you could use a broad journal entry as well.
Being mindful of this, we’ll be adding two accounts when you look at the category column. The first account, from your chart of accounts, could be the “Company Checking Account.” This is the account which will be losing the cash when you pay for your rental insurance. The second account, having said that, may be the “Prepaid Insurance Account.” This is the account that'll be gaining the amount of money you’re using to prepay for your insurance when it comes to year. In every QuickBooks journal entry, there will continually be two accounts, one to credit and another to debit.
quickbooks journal entry
Step 4: Enter the debit and credit amounts.
Once you’ve pulled the right accounts, you’ll fill in the corresponding debits and credits. As you can see, rental insurance costs $1,200—so you would add a credit to the bank account and a debit into the prepaid insurance account.
Because of the nature of a journal entry, you’re impacting your books, in other words, the general ledger. However, it is also important that a journal entry is always balanced. The debit column has got to balance the credit column, in spite of how many lines the entry is. Therefore, if perhaps you were listing multiple payments in this one entry, you will have to ensure that the debits and credits were equal at the end of the entry.
Step 5: Add a description and save.
The ultimate step needed to complete your QuickBooks journal entry would be to add a description. As you care able to see in our example above, the description explains that this journal entry is prepaying for rental insurance. Once you’ve filled in the description, you’ll save the journal entry and close it.
Ultimately, it’s quite simple to record a journal entry in QuickBooks Online. This being said, a QuickBooks journal entry is perhaps the clearest exemplory instance of double-entry accounting—when something is debited, something different is obviously credited. In this manner, every transaction within QuickBooks can be looked at like a journal entry.
A person invoice, for example, debits accounts receivable and credits revenue. A vendor bill, having said that, credits accounts payable and debits the expense of goods sold or expenses. This way, no matter what transaction you come right into QuickBooks Online a journal entry is being conducted behind the scenes.
