A journal entry is essential to all businesses as a means to record business transactions according to the Accounting Standards.
The first step that all accountants practice whenever business transactions take place is to record them to at least two accounts (known as double-entry accounting) in the general ledger.
The structure of a journal entry consists of :
- The date of the transaction
- The type of accounts and descriptions
- Debit amount
- Credit amount
The example of a basic journal entry format is tabulated as below:
|Date||Account Type||Debit ($)||Credit ($)|
According to the accounting rule, the total amount recorded under the debit column should be equal to the total amount stated under the credit column.
Thus, the account is considered to be in "balance."
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