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Definition of a Journal Entry


Businesswoman taking notes in conference room
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Definition: A journal entry is the record of a financial transaction recorded (entered) in a journal. A journal details all the financial transactions of a business and which accounts these transactions affect.

All business transaction are initially recorded in a journal using the double-entry or single-entry method of bookkeeping.

Typically, journal entries are entered in chronological order and debits are entered before credits.

Purpose of Journal Entries

Journal entries provide foundational information for all other financial reports and are used by auditors to analyze how financial transactions impact a business.

Journal entries are assigned to specific accounts using a Chart of Accounts, and the journal entry is then recorded in a ledger account.

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