Journal entry explained
Every transaction in double-entry books is recorded as a journal entry: a date, at least one account debited, at least one account credited, and a memo saying why. Total debits must equal total credits, or the entry can’t be saved.
Most journal entries are created for you. Saving an invoice, a bill or a payment records its entry behind the scenes. Manual journal entries are for the things that have no screen of their own: adjustments at month-end, accruals, depreciation, corrections and opening balances.
A manual entry is the wrong tool for an invoice or a bill. It moves the amounts, but it doesn’t update the customer’s or vendor’s balance, their statement or the aging reports. Use the invoice or bill screen instead.
Example: accruing a utility bill at month-end
March’s electricity is about $900, but the bill won’t arrive until April 8. To show March’s true cost on the March income statement, the bookkeeper records an accrual dated March 31:
| Account | Debit | Credit |
|---|---|---|
| Utilities expense | $900.00 | |
| Accrued liabilities | $900.00 | |
| Total | $900.00 | $900.00 |
When the April bill is entered, the accrual is reversed so the cost isn’t counted twice.
Where you’ll see it in fiscal50
Everything you record in fiscal50, from a categorized bank transaction to an invoice, bill or payment, posts as a balanced journal entry. Saving an invoice, for example, debits Accounts Receivable and credits revenue and sales tax payable.
For the rest, Add Journal Entry takes a document number, date, memo, payee and as many account lines as you need, and an entry posts only when its debits and credits are equal. From All Transactions, View shows any transaction’s journal entry.