{"id":10143,"date":"2022-12-06T10:55:10","date_gmt":"2022-12-06T05:25:10","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10143"},"modified":"2023-03-15T12:01:26","modified_gmt":"2023-03-15T06:31:26","slug":"journal-entry-explained","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/","title":{"rendered":"What is Journal Entry"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ded0903e8cb\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ded0903e8cb\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#What_is_Journal_Entry\" >What is Journal Entry\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#How_does_a_Journal_Entry_work\" >How does a Journal Entry work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Format_of_a_Journal_Entry\" >Format of a Journal Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Types_of_Journal_Entry\" >Types of Journal Entry<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Simple_Journal_Entry\" >Simple Journal Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Compound_Journal_Entry\" >Compound Journal Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Adjusting_Journal_Entry\" >Adjusting Journal Entry<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Examples_of_Journal_Entry\" >Examples of Journal Entry<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Sales_of_goods_or_services_for_cash\" >Sales of goods or services for cash<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#Payment_of_lease_for_property_or_equipment\" >Payment of lease for property or equipment<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#What_is_a_journal_entry\" >What is a journal entry?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#How_to_make_journal_entries\" >How to make journal entries?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#What_is_compound_journal_entry\" >What is compound journal entry?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/journal-entry-explained\/#What_is_debit_and_credit\" >What is debit and credit?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Journal_Entry\"><\/span><b>What is Journal Entry\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><b>The Journal, also called the Book of Primary Entry, is the first record of any transaction in a business. <\/b><span style=\"font-weight: 400;\">The information in these simple journal entries is then transferred to the other books of accounts.\u00a0<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Chronological record<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Journal entries are the first record of any business transaction. It is the simplest way to understand complex transactions.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Foundation of Accounting<\/b><\/td>\n<td>The journal forms the basis of all financial statements prepared for a business as all entries are transferred to other account books.<\/td>\n<\/tr>\n<tr>\n<td><b>Detailed yet concise<\/b><\/td>\n<td><span style=\"font-weight: 400;\">A journal entry contains <\/span><i><span style=\"font-weight: 400;\">all <\/span><\/i><span style=\"font-weight: 400;\">information needed to understand a financial transaction. It is the perfect story, telling you everything with no extra fluff.\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Follows the double-entry system of accounting<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Journal entries, like all books of accounts, follows the double entry system of accounting, ensuring consistency and uniformity.\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Wondering how the journal entry pulls this off? Let\u2019s take a look at how journal entries work.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_does_a_Journal_Entry_work\"><\/span><b>How does a Journal Entry work?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Journal entry works on the <\/span><a href=\"https:\/\/razorpay.com\/blog\/business-banking\/double-entry-system\/\"><b>double entry <\/b><\/a><span style=\"font-weight: 400;\">principle. In short, this means that every transaction has two sides. Both sides have equal importance, and <\/span><b>both<\/b><span style=\"font-weight: 400;\"> must be recorded.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, if the owner of Razor Bakery buys sugar worth Rs 50, she is deducting Rs 50 from her cash balance, but adding Rs 50 worth of sugar to her sugar balance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A journal entry records both sides of this transaction in the form of a debit and credit value.\u00a0<\/span><\/p>\n<p><b>Read more:<\/b><a href=\"https:\/\/razorpay.com\/blog\/business-banking\/double-entry-system\/\"><b> Double Entry System of Accounting\u00a0<\/b><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Debit is any value that is added to the business, and credit is any value that is deducted from the business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In Razor Bakery\u2019s example, sugar is debited, and cash is credited.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is easier to understand the concept of debits and credits if you visualize different buckets.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When Mrs. Pay bought sugar, he transferred Rs 50 from her cash bucket to her sugar bucket. Now, if you rename \u201cbucket\u201d to \u201caccount\u201d, you have the double entry system.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Format_of_a_Journal_Entry\"><\/span><b>Format of a Journal Entry<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here is how Mrs. Pay\u2019s sugar purchase would be recorded in the Journal.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Date<\/b><\/td>\n<td><b>Transaction<\/b><\/td>\n<td><b>Dr (Rs)<\/b><\/td>\n<td><b>Cr (Rs)<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\"><span style=\"font-weight: 400;\">25th November<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Sugar A\/c<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Cash A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<\/tr>\n<tr>\n<td><em><span style=\"font-weight: 400;\">(Being sugar purchased with cash)<\/span><\/em><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em><span style=\"font-weight: 400;\">Entry 1<\/span><\/em><\/p>\n<p><span style=\"font-weight: 400;\">Here are the rules that a journal entry must follow:\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\"><b>There must be a minimum of two accounts in the transaction.\u00a0<\/b><\/li>\n<li aria-level=\"1\"><b>Both debit and credit values should be equal<\/b><\/li>\n<\/ul>\n<div><\/div>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/current-accounts\/?r=blog_cta_business_banking_journal_entry_explained&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX<\/a><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_Journal_Entry\"><\/span><b>Types of Journal Entry<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Simple_Journal_Entry\"><\/span>Simple Journal Entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Journal entries with only two accounts are called <\/span><b>simple journal entries.\u00a0<\/b>We saw an example of this earlier.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Compound_Journal_Entry\"><\/span><strong>Compound Journal Entry<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A journal entry involving more than two accounts is called a <\/span><b>compound journal entry<\/b><span style=\"font-weight: 400;\">.<\/span><b>\u00a0<\/b>Here is an example:<\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Date<\/b><\/td>\n<td><b>Transaction<\/b><\/td>\n<td><b>Dr (Rs)<\/b><\/td>\n<td><b>Cr (Rs)<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"4\"><span style=\"font-weight: 400;\">25th November<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Sugar A\/c<\/span><\/td>\n<td><span style=\"font-weight: 400;\">50<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Cash A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">20<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Accounts Payable A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">30<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">(Being sugar purchased with cash and credit)<\/span><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Adjusting_Journal_Entry\"><\/span>Adjusting Journal Entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There is another kind of journal entry called the <\/span><b>adjusting journal entry. <\/b><span style=\"font-weight: 400;\">To understand adjusting journal entries, let\u2019s continue with the above example where Mrs. Pay paid for sugar with both cash and credit.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Two weeks later, Mrs. Pay finally cleared her dues of Rs 30 with the sugar seller. This means that she pays Rs 30 in cash.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are the two sides of the transaction when Mrs. Pay clears her dues of Rs 30 with the sugar seller.\u00a0<\/span><\/p>\n<p><strong>Accounts Payable A\/c &#8211; Rs 30 Debited (added)<\/strong><\/p>\n<p><strong>Cash A\/c Credited &#8211; Rs 30 (deducted)<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Here is the journal entry:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Date<\/b><\/td>\n<td><b>Transaction<\/b><\/td>\n<td><b>Dr (Rs)<\/b><\/td>\n<td><b>Cr (Rs)<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\"><span style=\"font-weight: 400;\">25th November<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Accounts Payable A\/c<\/span><\/td>\n<td><span style=\"font-weight: 400;\">30<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Cash A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">30<\/span><\/td>\n<\/tr>\n<tr>\n<td><em><span style=\"font-weight: 400;\">(Being dues cleared with cash)<\/span><\/em><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em><span style=\"font-weight: 400;\">Entry 3<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/em><\/p>\n<p><span style=\"font-weight: 400;\">Remember how debits are additions and credits are deductions? Since the Accounts Payable account has Rs 30 in both debit and credit, it cancels out to a net value of zero!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is an <\/span><b>adjusting journal entry<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Examples_of_Journal_Entry\"><\/span><b>Examples of Journal Entry<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here are a few examples of how your business\u2019s journal entries might look.\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Sales_of_goods_or_services_for_cash\"><\/span><b>Sales of goods or services for cash<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Cash has been <\/span><b>added <\/b><span style=\"font-weight: 400;\">to the business, so we debit cash.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Goods have been <\/span><b>deducted<\/b><span style=\"font-weight: 400;\"> from the business, so we credit goods.\u00a0<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Date<\/b><\/td>\n<td><b>Transaction<\/b><\/td>\n<td><b>Dr (Rs)<\/b><\/td>\n<td><b>Cr (Rs)<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\"><span style=\"font-weight: 400;\">25th November<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Cash A\/c<\/span><\/td>\n<td><span style=\"font-weight: 400;\">200<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Goods\/services\u00a0 A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">200<\/span><\/td>\n<\/tr>\n<tr>\n<td><em><span style=\"font-weight: 400;\">(Being goods\/services sold for cash)<\/span><\/em><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Payment_of_lease_for_property_or_equipment\"><\/span><b>Payment of lease for property or equipment<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">When your business pays to lease out a building or machinery for its daily operations, here are the two parts of the transaction.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The building\/machine has been <\/span><b>added <\/b><span style=\"font-weight: 400;\">to the business, so we debit building\/machine<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If your business paid for the building\/machine with cash, then cash has been <\/span><b>deducted, <\/b><span style=\"font-weight: 400;\">so we <\/span><b>credit cash.\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If your business paid for the building\/machine with a loan or if you are due to pay the lease, then we <\/span><b>credit the lease payable account. <\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Date<\/b><\/td>\n<td><b>Transaction<\/b><\/td>\n<td><b>Dr (Rs)<\/b><\/td>\n<td><b>Cr (Rs)<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\"><span style=\"font-weight: 400;\">25th November<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Building \/ Machine A\/c<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5,00,000<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Cash \/ Lease Payable A\/c<\/span><\/td>\n<td><\/td>\n<td><span style=\"font-weight: 400;\">5,00,000<\/span><\/td>\n<\/tr>\n<tr>\n<td><em><span style=\"font-weight: 400;\">(Being building\/machine leased for cash\/credit)<\/span><\/em><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Today, there are some really cool accounting software on the market that help founders and accountants maintain books of accounts without having to manually enter every single transaction.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately, all your business\u2019s payments and receipts happen through your bank account \u2013 and most banks don\u2019t integrate with accounting software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means that businesses spend a lot of time and effort entering all their financial transactions on accounting software manually.<\/span><\/p>\n<p><b>Fortunately, RazorpayX has a solution for smart business owners!<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Our super-smart Current Accounts <a href=\"https:\/\/razorpay.com\/x\/accounting-payouts\/\">integrate<\/a> <a href=\"https:\/\/razorpay.com\/x\/accounting-payouts\/quickbooks\/\">smoothly<\/a> with <a href=\"https:\/\/tallysolutions.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Tally<\/a>, Zohobooks, and Quickbooks, meaning you get a seamless, 2-way sync.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Every transaction you make with your RazorpayX Current Account automatically gets added to your accounting software of choice!\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">No manual entry, no errors, and no wasted time.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">RazorpayX Current Accounts have a lot more to offer, too. Interested?\u00a0<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_journal_entry_explained&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX<\/a><\/div>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_a_journal_entry\"><\/span>What is a journal entry?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Journal Entry is the first record of any transaction in a business. The information in these simple journal entries is then transferred to the other books of accounts. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"How_to_make_journal_entries\"><\/span>How to make journal entries?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There are four columns in the journal. The first column is for the date, because journal entries are chronologically recorded. The second is for the name of accounts that the transaction concerns. The third column is for the debit (added) value, and the fourth column is for the credit (deducted) value. <\/p>\n<p>Journal entries will also have a brief explanation of the transaction in brackets underneath each entry. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_compound_journal_entry\"><\/span>What is compound journal entry?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>A journal entry with more than two accounts involved in the transaction is called a compound journal entry. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-4\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_debit_and_credit\"><\/span>What is debit and credit?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Debit refers to any value that is added to the business, and credit refers to any value that is deducted from the business.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is Journal Entry\u00a0 The Journal, also called the Book of Primary Entry, is the first record of any transaction in a business. The information in these simple journal entries is then transferred to the other books of accounts.\u00a0 Chronological record Journal entries are the first record of any business transaction. It is the simplest<\/p>\n","protected":false},"author":106,"featured_media":10146,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[366,367,372],"class_list":{"0":"post-10143","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-accounting-basics","9":"tag-accounting-for-founders","10":"tag-journal-entry"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10143"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10143\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/10146"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}