Journal entries in QuickBooks are related to making adjustments to the accounts which are otherwise quite unrealistic or difficult with the help of point of sale. Creating these entries is neither too difficult nor too easy. They are created with the help of the Make General Journal Entry window in QuickBooks.
reasons behind the creation of a journal entry:
- Journal entry is very important because it enters debits and credits manually, like in conventional accounting systems.
- Journal entry is required when the user is a money transfer between income and expense accounts.
- The Journal entry is also recorded when the client a money transferred from an asset-liability, or equity account to an income and expense account.
There are a few important points to be kept in mind though while creating and making these entries:
- It is imperative for the user to know the path of debit and credit as without this knowledge, the account can be in a mess which one wouldn’t want to be in
- Have a chat with a professional if there is an inch of doubt about such transactions
- It is the old-school method of accounting which most of accountants prefer owing to its accuracy and user-friendliness
- A detailed and accurate knowledge of financial accounting is a must
- You need to be an SME abbreviated for Subject Matter Expert
Journal Entry is an ideal step towards being a step forward in the game of business as it ensures that there is no glitch in the financial transactions due to accrual for long. It is highly recommended that in order to get a better understanding of actual revenue, expenses, and financial position, Journey entry is a Must. While making a Journal entry, try to assign a number to the entry so that it is easier for you to locate the entry in the future without any difficulty.
If we need to bi-furcate the entries, then there are five in total which are called Accrued Expense, Deferred Expense, Accrued Revenues, Deferred Revenues and Noncash transactions. All the transactions can be entered systematically for a fair calculation of accountants in the long run.
How to Create a Journal Entry in QuickBooks Desktop?
- First, you need to open QuickBooks and then click on the company and choose to make a journal entry.
- Modify the Date field if you required in the create a General Journal entry.
- When you are creating a journal entry you need to fill in other details like a journal entry in Entry No, Field, the general ledger account number in the Account column.
- Also, you need to enter the debit and credit amount for the account you select in the Debit and Credit columns.
Note: Remember this the debits and credits must be equal so that the entry can be balanced and QuickBooks can post it.
- After that, file the memo description in the Memo column.
- From filling in the ledger account numbers to the memo description, Keep doing these steps until the transaction reaches a zero balance. Make sure the debit total and credit total are the same records in journal entries in the QuickBooks process.
- After that, select Save and Close or click Save and New.
How can Manage Journal Entry in QuickBooks?
Now the question arises, of how to create and manage the journal entry. Just sit back, with no hassle; we can follow the lengthy yet effective steps.
- When log in to QuickBooks, you will see the Company From that menu, you need to choose Make General Journal Entries to start with
- The second step is to change the Date Field. This step can be avoided too as it is optional
- After you have reached the Make General Journal Entries field, if you see no number for the entry field, you can add a number to your journal after which all other entries will be numbered subsequently by QuickBooks. It is similar to what we see when we use Microsoft Excel
- Following the distribution line, first of all check the Account Column. The first account of the transaction needs to be entered in this field. The first account by default will be Accounts Receivable or Accounts Payable in case you are using any of these accounts
- Next step is to work on Debit or Credit Column. For the previous account selected, entry for debit or credit needs to be made
- After this step is a step which is optional. In this step, a memo regarding the amount needs to be entered
- After this is the step to fill in the details like the Customer name, vendor name, Employee name or other name required pertaining to the transaction. These detail are to be filled in the Name Field
- Following the above step is the step to either bill or not bill a customer. If you have to bill, you click on the checkmark in the Billable Field and if you don’t have to bill, make sure to uncheck. This step is again optional, you can either choose to follow it or not. It is at your discretion
- The next optional step is to assign a class to the amount
- Two steps need to be repeated. The steps are selecting the first account and then assigning a class to the amount. After these steps have been repeated, you are good to go to the next and the final steps
- Repeating the above mentioned steps should enable you to reach the distribution lines until you reach a zero balance
- It should be made sure that the total in the debit column and the total in the credit column should match
- Finally click on Save and Close. This automatically saves your journal
With bigger name comes bigger responsibility and therefore if a person is running a firm that needs a good number of accounting works, making Journal Entry is a mandate. Who doesn’t want to keep a record of what one is doing? Everyone does. Tracking is essential to maintain an organized business that makes life comfortable and lucid.
Data management has always been an integral part of any business strategy so that no future complexities occur. It is also the mirror to what the business looks like. Journal Entries can be easier than ever imagined if actualized. Recording and managing business accounts go hand and hand and QuickBooks makes way for an excellent idea of categorizing work and assigning tasks as per importance. No matter how advanced the technology gets, how developed our system gets, manual entry is important for certain simplifications.
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