Journal Entries
Here are
some sample journal entries for typical business transactions. The debit is the first line that is set to
the left, and the credit is the second line that is indented further over to
the right:
To pay the rent:
Rent Expense $XX.XX
Checking Account $XX.XX
To sell a service:
Checking Account $XX.XX
Consulting Income $XX.XX
To sell a service on account:
Accounts Receivable $XX.XX
Consulting Income $XX.XX
To receive payment from the customer:
Checking Account $XX.XX
Accounts Receivable $XX.XX
To sell a product and record its cost and removal from inventory:
Checking Account $XX.XX
Revenue $XX.XX
Cost of Goods Sold $YY.YY
Inventory $YY.YY
If your business uses an accounting program, then you may not even realize that you are making journal entries. To pay a bill, you might pull up your checking account or initiate an activity called “write check.” But, by choosing the checking account, you have made the choice for one side of a journal entry, and when you choose an account such as “Rent Expense” from a drop-down, you have determined the other side of the journal entry.
To pay the rent:
Rent Expense $XX.XX
Checking Account $XX.XX
To sell a service:
Checking Account $XX.XX
Consulting Income $XX.XX
To sell a service on account:
Accounts Receivable $XX.XX
Consulting Income $XX.XX
To receive payment from the customer:
Checking Account $XX.XX
Accounts Receivable $XX.XX
To sell a product and record its cost and removal from inventory:
Checking Account $XX.XX
Revenue $XX.XX
Cost of Goods Sold $YY.YY
Inventory $YY.YY
If your business uses an accounting program, then you may not even realize that you are making journal entries. To pay a bill, you might pull up your checking account or initiate an activity called “write check.” But, by choosing the checking account, you have made the choice for one side of a journal entry, and when you choose an account such as “Rent Expense” from a drop-down, you have determined the other side of the journal entry.
Comments