How I should know about to write Journal entries?
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A journal entry is a method used to enter an accounting transaction into the accounting records of a business. Every journal entry must generate at least two equal and offsetting entries. This is because every transaction involves a change in at least two places in the accounting records, and the total of all debits and credits must balance. For example:
The format of a journal entry is for the first column to contain the account name / number into which the entry is being made, the second column to contain the debit amount being entered, and the third column to contain the credit amount being entered. The account name / number of the account being credited is indented. It is also useful to include a unique journal entry identification number and the date of the entry, as well as a brief narrative description. If there are a large number of journal entries, you may also want to include an approval signature block, as well as a signature and date block for the person who enters the journal entry into the accounting software. The format of a basic journal entry is:
|Account name / number||$xx,xxx|| |
| Account name / number|| ||$xx,xxx|
The basic structural rules of a journal entry are that there must be a minimum of two line items in the journal entry, and that the total amount entered in the debit column equals the total amount entered in the credit column.
There are several best practices related to writing journal entries, which are: