Record A Journal Entry In QuickBooks

Simple tips to Record a Journal Entry in QuickBooks Online

Steps to make a QuickBooks Journal Entry in 5 Steps

Navigate to the journal entry feature in QuickBooks Online.

Fill in the date and journal number.

Go into the correct accounts into the “Category” column.

Enter the debit and credit amounts until the entry is balanced.

Add a description and save.

Managing your business’s accounting can be complicated—even aided by the assistance of accounting software like QuickBooks. This being said, even although you outsource your bookkeeping or accounting, it’s often beneficial to know how some basic features work. If you’re using QuickBooks Online, maybe you are unclear about how to make a journal entry. A journal entry, as a reminder, is a transaction that is entered directly to your business’s general ledger. So—how do you really make a QuickBooks journal entry?

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We’re here to break it down. We’ll show you the five simple steps you can follow to record a journal entry in QuickBooks Online and get a leg up on managing your accounting processes.

What exactly is a QuickBooks Journal Entry?

First, let’s clarify exactly what a QuickBooks journal entry is. Generally, QuickBooks will automatically record transactions as they occur—you’ll record an invoice, sales receipt, bill, check, etc.—and QuickBooks will pull this data into the general ledger.

However, if you ever need certainly to enter a transaction manually, choose to correct a mistake, as an example, you’ll want to use the journal entry feature within QuickBooks Online. When you post a journal entry in QuickBooks, or in any kind of accounting software, it must balance—any debit you create should have a corresponding credit and the other way around.

For instance, as you’ll see below, if you’re recording a journal entry for a check you wrote for a year’s worth of insurance, you’ll need certainly to list a debit into the insurance account and a credit to your bank checking account.

How exactly to Record a QuickBooks Journal Entry

With the basics at heart, let’s break up exactly simple tips to record a journal entry in QuickBooks.

Even as we mentioned, we’ll be using “prepaid insurance” in this example.

Step 1: Navigate into the journal entry feature.

The first step is simple—you’ll need to navigate to the part of your QuickBooks Online software that enables you to post journal entries. If you click on the + icon at the top right of one's file, you’ll see a dropdown menu called “Create” that lists “Journal Entry” within the farthest column regarding the right-hand side.

When you’ve clicked “Journal Entry” you’ll navigate to your entry itself to fill out the required information.

Step two: fill out the date and journal number.

As you can see below, the journal entry form in QuickBooks on the net is fairly easy. When you’ve brought up this form, you’ll want to first edit the journal date. QuickBooks will automatically pull in the present date, so if you’re recording a journal entry from a previous month or day, you’ll want to make sure to enter the correct date.

Next, you’ll want to fill in the journal number. In this example, the journal number is 151—QuickBooks will automatically number any new journal entries sequentially following this number (simply put, the next you might be 152).

Step three: go into the correct accounts in the “Category” column.

In this example, we’re creating a journal entry for prepaid rental insurance. Because rental insurance is generally prepaid for 30 days or per year, it is considered an “other current asset” to start out, but needs to be expensed out once the year goes on, monthly. This being said, you might book the prepaid asset using a check, but you can use a broad journal entry as well.

With this thought, we’ll be adding two accounts within the category column. The initial account, from your chart of accounts, may be the “Company bank account.” This is the account which will be losing the cash whenever you pay money for your rental insurance. The 2nd account, on the other hand, could be the “Prepaid Insurance Account.” Here is the account that will be gaining the cash you’re using to prepay for your insurance for the year. In any QuickBooks journal entry, there may always be two accounts, someone to credit and one to debit.

Step 4: Enter the debit and credit amounts.

When you’ve pulled the perfect accounts, you’ll fill out the corresponding debits and credits. As you can plainly see, rental insurance costs $1,200—so you would add a credit to your bank account and a debit into the prepaid insurance account.

Because of the nature of a journal entry, you’re impacting your books, this means, the typical ledger. However, it’s also essential that a journal entry is often balanced. The debit column needs to balance the credit column, regardless of how many lines the entry is. Therefore, if you were listing multiple payments in this one entry, you would need to make certain that the debits and credits were equal at the conclusion of the entry.

Step 5: Add a description and save.

The final step had a need to complete your QuickBooks journal entry would be to add a description. As you can see in our example above, the description explains that this journal entry is prepaying for rental insurance. After you’ve filled within the description, you’ll save the journal entry and close it.

Ultimately, it’s fairly simple to record a journal entry in QuickBooks Online. This being said, a QuickBooks journal entry is probably the clearest example of double-entry accounting—when something is debited, another thing is always credited. In this manner, every transaction within QuickBooks can be thought of like a journal entry.

A customer invoice, as an example, debits accounts receivable and credits revenue. A vendor bill, on the other hand, credits accounts payable and debits the cost of goods sold or expenses. In this manner, regardless of what transaction you come right into QuickBooks Online a journal entry is being conducted behind the scenes.

How Transactions Post in QuickBooks Online

Even as we mentioned previously, QuickBooks typically pulls the information essential to add a transaction to the general ledger automatically. If this occurs, a journal entry is actually happening behind the scenes. Let’s take a good look at how that actually works:

If, for example, we had paid for the rental insurance using a check, you would enter that check as such:

To start to see the process that occurs when you enter this check into QuickBooks, you can click the “More” tab in the bottom after which “Transaction Journal.”

quickbooks journal entry

When you click on the transaction journal, you can view the automatic “journal entry” that is happening behind the check. As you’ll see below, the Check adds a credit of $1,200 into the bank account and a debit of $1,200 to your prepaid insurance account—just even as we completed in our example above.

quickbooks journal entry

How exactly to Create a Recurring Journal Entry in QuickBooks Online

So, within our example above, we credited the business checking account and debited the prepaid insurance account, however, because we prepaid for a year of insurance, perhaps you are wondering how exactly to actually expense out this cost, monthly, whilst the year continues on.

To get this done, we would create another journal entry. In this instance, we’d fill out the same information, but instead of crediting the checking account, we’ll credit the prepaid insurance account and debit the specific insurance expense account.

quickbooks journal entry

As you care able to see, for the month of January, this journal entry just took $100 (1/12 regarding the total payment) through the prepaid insurance asset account and moved it to the actual insurance expense account—meaning it was moved from the Balance Sheet towards the Profit and Loss. You would perform this journal entry every month and certainly will automate the method by simply making it “recurring.”

To achieve this, you’ll click on the “make recurring” text in the bottom regarding the journal entry. Now this same journal entry will repeat each month through the end of the year.

quickbooks journal entry

This being said, you may want to begin from the Recurring Transactions list beneath the Gear Icon in the upper-right corner associated with QuickBooks Online file, and create this repetitive journal entry this way as well.

quickbooks journal entry

In this instance, you would click “Recurring Transactions” and then “Select New” and finally, choose “Journal Entry” from the Transaction Type drop-down menu:

quickbooks journal entry

As shown below, this will pull up a “Recurring Journal Entry” form where you’ll be able to fill out the same information once we illustrated into the example above. You’ll credit the prepaid insurance account and debit the insurance expense account and indicate that this entry should recur monthly. It is possible to choose a start date and an end date.

We hope this short article be worthy and beneficial to discover ways to Record A Journal Entry In QuickBooks. If you want to find out more help and best support from professional experts, dial QuickBooks Support Phone number anytime.

Record A Journal Entry In QuickBooks

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