Accounting Journal Entries

A journal entry, in accounting services is an entry of different transcription into items accounting journal. The journal entry consists of different products or items, which are entered either in debit or in credit side of entry page.

• It is the first part of accounting and listing services.?
• Items are categorized in either debit or credit side of journal.
• It is a record that keeps accounting transactions in chronological order.
• All accounting transactions are recorded through journal entries that shows name of the account, amounts, listing and recorded, whether the amount is on debit side or credit side.
• Journal entries are very important in terms of accounts transaction
• Journal entry gives idea about the products listing to develop ledger (a record that keeps accounting transactions in chronological order) account.

Double entry accounting

• Accounting system uses double entry accounting to record transactions.
• Double entry indicates that the transaction should be either debit side or credit side.
• Debit is always in left hand side and credit is on right hand side of journal entry or accounting Performa.
• The sum of amount in debit side (left side) must be equal to credit side (right side).
• The situation when debit side is equal to credit side called “BALANCED.”

GENERAL JOURNAL

 

Date	Account Titles and Explanation	Posted Ref.		Debit	Credit
Jan. 2	Cash			10.000
	Contributed Capital				10.000

 

Wrong Method: Unbalanced Journal Entry

 

Date	Account Titles and Explanation	Posted Ref.		Debit	Credit
Jan. 2	Cash			15.000
	Contributed Capital				10.000

Elucidation example:

1.) Debit entries are written first and then credit entries are written.
2.) Each day/date of transaction must be provided
3.) Total debits must equal total credits (you can see above figure then you can easily judge, which is wrong, and which is right method of journal entry)

 

Fraud

 

It is easier to perpetrate financial statement in journal entries fraud than adjusting the sub-ledgers. Management override is required in former process while latter process requires collusion with other departments. At Cendant, WorldCom and Xerox, false journal entries figured prominently in the frauds.