There are two major types of accounting in which a journal entry is made -- single-entry and double-entry accounting. In single-entry accounting, only one entry is recorded in the general journal. In double-entry accounting, every transaction is recorded twice in the journal -- once in the account that is losing the funds and once in the account that is gaining the funds..
In accounting, you have to understand the journal entry in the context of journaling. According to Carl S. Warren et al, authors of "Financial and Managerial Accounting," journaling refers to recording each financial transaction in a journal. The journal entry is the actual entry that you make in a financial journal. A business or an individual can keep records of financial transactions using a journaling system.
In double-entry accounting, the goal is to balance the financial records. You have to determine that the sum of the credits equals the sum of the debits. Debits and credits are entered in different accounts. If these two amounts are not equal, then at least one error has been made in entering journal entries into the journal or later in posting these entries into the general ledger. An accountant goes back through journal entries to find errors. When all of the debits equal the credits, the financial statements can be prepared.
Debits and Credits
Two types of entries are recorded in double-entry accounting, or the recording of journal entries. The debit is a transaction entered on the left side of the column, the credit is a transaction is entered on the right side of the column. These terms do not have any value, either positive or negative, according to Wayne Label, author of "Accounting for Non-Accountants."
Referencing and Researching Entries
To go back to research a journal entry, look at the two accounts where original entries were made. One account must record the financial transaction as a debit, and the other account must record the financial transaction as a credit. Look for a description of a transaction to learn more about it. To research the transaction itself, go from the general journal entry to the supporting documentation. If a property purchase was made, for example, look at the original purchase agreement. Determine if the journal entry was made correctly based on the records.
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