What is a Simple Journal Entry?

📚 New! Get my 2nd Edition Accounting Cheat Sheet Bundle → https://accountingstuff.com/shop A Journal Entry is a record of a Financial Transaction in an accounting system. Simple Journal Entries are used for straightforward transactions that involve just two accounts - we have one debit in the left column and one credit in the right column. Let me explain with an example... Chick n' Duck's Dreamland is a Petting Zoo. On September 1st, the business buys a new Feed Delivery System for $10,000. How do we record this transaction in a Journal Entry? We start with a unique Journal Number to help us identify the transaction. Then we add a Posting Date which tells us when the transaction took place. Followed by a short description which explains the purpose of the journal. Now we need to enter the accounts names. This is a Simple Journal Entry, so it only involves two accounts. On the one hand, we need to increase Feeding Equipment to record the new Fixed Asset on the Balance Sheet. And on the other hand, we want to decrease Cash which is a Current Asset on the Balance Sheet. Both of these are Assets, which means they're Normal Debit Accounts, so debits increase them and credits decrease them. So we debit Feeding Equipment by $10,000 to increase it and credit Cash by $10,000 to decrease it. The Total Debits match the Total Credits because in Double-Entry Accounting every Journal Entry has to balance. 🔴Subscribe for more Accounting Tutorials → https://geni.us/subtothechannel 🔎FAQ ▪ My Favourite Accounting Book for Beginners → http://geni.us/5mKR7m 🔝 CLOUD ACCOUNTING SOFTWARE ▪ XERO (Free Trial / Discount) → https://xero5440.partnerlinks.io/08mfchsgfw8z ▪ QuickBooks Online USA (Free Trial / Discount) → https://geni.us/quickbooksonlineusa ▪ QuickBooks Online Canada (Free Trial / Discount) → https://geni.us/quickbooksonlinecanada 🚶FOLLOW ME ON ▪ Instagram → https://www.instagram.com/accountingstuff ▪ TikTok → https://www.tiktok.com/@accounting_stuff ▪ Facebook → https://www.facebook.com/accountingstuff/ ________________________ DISCLAIMER Some of the links above are affiliate links, where I earn a small commission if you click on the link and purchase an item. You are not obligated to do so, but it does help fund these videos in hopes of bringing value to you! ________________________ #accounting #accountingbasics #accountingstuff