JournaldrillJournal entry format
A journal entry lists the date, the accounts debited (written first, flush left) with their amounts in the debit column, the accounts credited (indented) with their amounts in the credit column, and a one-line explanation. Total debits must equal total credits; an entry with more than two accounts is a compound entry.
Syntax
Date | Dr Account(s) amount / Cr Account(s) amount | Explanation| Part | What it is |
|---|---|
Date | The transaction date, not the date you record it. |
Debit line(s) | Listed first, account name flush left, amount in the debit column. |
Credit line(s) | Listed after the debits, account name indented, amount in the credit column. |
Explanation | One short line saying what happened, such as Paid March rent. |
Examples
Mar 1 Dr Cash 20,000 / Cr Owner's Capital 20,000 (Owner invested cash)Result: Assets up 20,000, equity up 20,000
A simple entry: one debit, one credit.
Mar 3 Dr Equipment 15,000 / Cr Cash 5,000, Cr Notes Payable 10,000 (Bought equipment, part cash, part note)Result: Assets up 10,000 net (equipment +15,000, cash -5,000), liabilities up 10,000
A compound entry: debits 15,000 equal credits 5,000 + 10,000.
Mar 5 Dr Rent Expense 1,500, Dr Utilities Expense 300 / Cr Cash 1,800 (Paid rent and utilities)Result: Expenses up 1,800, assets down 1,800
Two debits can share one credit as long as the totals agree.
Common mistakes
- Listing the credit before the debit: convention puts debits first and indents the credit lines, and graders and software expect it.
- Writing the amount on both sides for one account: each account line carries one amount in either the debit or the credit column.
- Using a vague account name such as Expense or Money: use the exact ledger account, for example Rent Expense or Cash.
- Forgetting the explanation: a one-line memo is part of the entry and is what someone auditing the books later relies on.
Practice Journal entry format
These drills check your answer on live data, free, no account needed.
- Equipment bought with cash and creditHarbor Print Shop buys a large-format printer for $9,000. It pays $3,000 in cash today and agrees to pay the remaining balance to the supplier in 30 days.
- Paying rent and utilitiesOn October 31, Summit Yoga Studio writes two checks: $2,100 for October rent on its studio space and $340 for the October electricity bill. Neither amount was recorded earlier. Record both payments in one compound entry.
Questions
What is a compound journal entry?
An entry with more than one debit, more than one credit, or both, such as buying equipment partly with cash and partly with a note. The debit total still equals the credit total.
Do journal entries need a description?
Yes. A short explanation under each entry states the transaction and, if useful, the document reference such as an invoice number.
What is the difference between a journal and a ledger?
The journal records entries in date order as they happen; the ledger collects the same amounts by account so you can see each account's balance.
Related
- Debits and creditsDebits and credits in plain English: the rule for assets, liabilities, equity, revenue and expenses, the DEALER memory aid and worked entries.
- Trial balanceA trial balance lists every ledger balance and checks that debits equal credits. Steps to prepare it, a worked example and how to find the error.
- Owner investmentHow to record an owner investing cash or equipment: debit the asset received, credit Owner's Capital or Common Stock. Examples and common mistakes.
- Purchase on accountHow to record buying on credit: debit the asset or expense received and credit Accounts Payable. Examples for supplies, equipment and merchandise.