Help for an Accounting Journal Entry
Accountants manage the financial recording and reporting responsibilities for an organization. They base reports on the organization's financial transactions and log journal entries to record such transactions. Accounting students learn to create journal entries, and professional accountants write journal entries to update their organization's financial records. Understanding how to record transactions helps accountants keep accurate financial records.
Other People Are Reading
-
Understand the Transaction
-
Many accountants and accounting students struggle with understanding what transaction occurred. Often, more information is often than what the accountant needs for the journal entry. The student or the professional needs to examine the information in order to understand the transaction and write the journal entry correctly.
Identify the Obvious
-
Once the accountant understands the transaction, she needs to identify the obvious components of that journal entry. If the dollar amount of the transaction is obvious, she needs to note that amount. She will at know, at least, that she has this part of the journal entry correct.
-
Less Obvious Information
-
Once the obvious components of the journal entry are identified, the accountant can focus on the less obvious data. Many times the journal entry looks familiar after the obvious components are identified. The journal entry may resemble a journal entry they worked on previously or studied in school. The accountant should review the financial account looking for previous entries for similar transactions. If none exist, she can review her accounting textbooks for similar transactions and review the journal entries recorded for those transactions. Using either the textbook example or a previous entry, the accountant can model her current entry after one of these earlier examples and fill in the less obvious components.
Balance Debits and Credits
-
Every accountant knows that the debits must equal the credits. He should add the total debits and the total credits in the journal entry and compare the two. If the debits and credits balance, the journal entry is complete. If the debits and credits do not balance, the accountant must revise the journal entry.
-
