How to Create Journal Entries in QuickBooks Online

A journal entry records an accounting transaction directly to the ledger. Use one to adjust account balances, correct errors, post accruals and depreciation, or record anything that does not go through a standard QuickBooks form — such as the bounced cheque in this example. Every entry must balance: total debits equal total credits.

Step 1 – Open a New Journal Entry

A Create (+) – Click the Create button at the top of the left navigation bar to open the transaction menu.

B Journal entry – Select Journal entry under the Other column.

Figure – Opening a new journal entry

Step 2 – Enter the Debit and Credit Lines and Save

Check the Total row beneath the lines before saving — the debit and credit columns must show the same figure, as they do here at Ksh 100,000.00. QuickBooks will not save an entry that does not balance.

A Journal date – The date the adjustment takes effect — it decides which accounting period the entry falls into.

B Account (line 1) – Select the first account affected. In this example, Accounts Receivable is credited to reverse a cheque that bounced.

C Credits – Enter the credit amount for that account.

D Description (line 1) – Explain the purpose of the entry so it makes sense to whoever reviews the books later.

E Name – Select the customer, supplier or employee the line relates to. This is required when the account is Accounts Receivable or Accounts Payable.

F Account (line 2) – Select the second account affected — here the bank account the cheque was originally deposited into.

G Debits – Enter the debit amount. Total debits must equal total credits.

H Description (line 2) – Repeat the explanation on the second line so both sides of the entry are documented.

I Save and new – Saves this entry and opens a blank form for the next one. Use the arrow beside it for Save and close instead.

Figure – Entering the debit and credit lines