Basic Accounting Journal Entries

It used to be an actual book that the bookkeeper would use to make accounting entries.

These days bookkeepers enter transactions on the computer using an accounting program.

Our recording in the journal is also called a journal or a journal entry.

The journals look like this:

The purpose of journals is to keep a day-to-day record of a business and its transactions.

Each journal can also be matched to the relevant supporting document (such as a check stub or a receipt) by use of a cross-referencing code or folio number. This code or folio number simply cross-references between one document and another. If the first transaction above of $15,000 capital was made by issuing check number 38, then one could write ‘Ch-38’ (for example) under the folio number.

Journals may also often include a cross-referencing code or folio number to cross-reference between the journal entries and the accounts (the next step). Each specific item, such as bank, would have its own folio number, and this would be used to cross-reference from the journal entry involving ‘bank’ to the banks’ account in the ledger (this will be covered in the next section). The folio numbers make it simple to trace information through the steps in the accounting cycle.

These cross-referencing numbers or codes would work like this:

There are actually various different types of journals, and in our next lesson we're going to see what they look like and how they work.

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