Recording a journal entry is another important way to keep track of all your transaction details. Your chapter will easily be able to look up accounts along with their debit and credit amount. You as an admin can distinguish between similar accounts by adding a memo to each journal entry, making it easier to find what you’re looking for.
Here's how to record a journal entry:
1. from your Admin Dashboard, click on Banking on the left sidebar to go to the Banking Overview
2. Scroll down to the Journal Entry tile and click Create
3. From this page, you can record a Journal Entry.
- Select the Account (Chart of Accounts or Bank Account) from which you wish to credit or debit
- Add the Debit Amount
- Add the Credit Amount
- Add a Memo to the journal entry
Note: Debits are always on the left side of the entry, while credits are always on the right side,
An easy way to understand journal entries is to think of Isaac Newton's third law of motion, which states that there is an equal and opposite reaction for every action. So, whenever a transaction occurs within a chapter's finances, at least two accounts must be affected in opposite ways: a debit AND a credit.
- Assets and expenses should be debited to add to the accounts.
- Liabilities and Revenue should be credited to add to them.
If you need to deduct it would be the opposite.