In accounting, the journal is a chronological record of the business's financial transactions. It provides an explanation of each transaction, lists the transaction amount, and names the accounts affected. Historically, the journal was a book in which accountants recorded transactions and performed calculations using a pencil. Today, most accountants and bookkeepers use software to record financial transactions, though we still use terms such as "journal entries" and "keeping the books" to describe accounting activities.
In traditional accounting, journal entries are either debits or credits, they are assigned to an account from the Chart of Accounts, and the total of the debits always equals the total of the credits. QuickBooks Online is accounting software that automatically records journal entries for you, making accounting and bookkeeping easy. QuickBooks Online is # 1 in cloud accounting for small businesses1 and it organizes all of your accounting data in one central location. It is the easy way to make journal entries, organize transactions, perform calculations, and keep your books balanced. Try QuickBooks Online for free.
QuickBooks Online is intuitive and easy-to-use accounting software that walks you through the process of recording transactions. It includes specific screens for entering each type of transaction and it automatically records a journal entry and performs calculations for you. For example, you can write a check in QuickBooks Online by going to Banking > Write Check. In just a few clicks you can specify the payee, the check number, the date, the amount, and assign the payment to an account from the Chart of Accounts. The journal entry for the payment is automatically recorded, the general ledger is automatically updated, and all appropriate calculations are completed behind the scenes. Making journal entries with QuickBooks Online is fast and easy.
In QuickBooks Online, most journal entries are recorded automatically. However, there are exceptions in which you need to manually make journal entries, such as in the case of moving money from one account to another. You can manually make journal entries to transfer money between income and expense accounts or to transfer money from an asset, liability, or equity account to an income or expense account. To do this, simply to go to Banking > More > Journal Entry and enter the transaction date, choose the account from the Chart of Accounts drop-down menu, and enter the dollar amount in the Credit or Debit field. Remember, debits must equal credits. Therefore, you will need to make two journal entries - one for the credit and one for the debit. For example, if you move $1,000 from an equity account to an expense account, you will make a journal entry to debit the equity account by $1,000 and make a second journal entry to credit the expense account for $1,000.
QuickBooks Online gives you access to your accounting data 24/7. You can review your Profit and Loss Report (income statement), the cash flow statement, and more than 20 other financial reports anytime. To see your income statement, simply go to Reports > Profit and Loss and it is quickly generated for you. This report lists income, expenses and net profit (or loss), making it easy to know exactly where your business stands. You can click into any total amount listed on the Profit and Loss report and see the journal entries behind that amount. Try QuickBooks Online for free and see how it makes recording transactions and making journal entries easy.
1 Based on number of paying users as of August 2012 (U.S. data)