General Journal

How to (Closing) End Journal Entry?

Companies record accounting entries during a period. These entries concern business transactions that they face during that period. Usually, companies record these transactions as they occur. During this process, they consider various accounting principles and standards. Companies use journal entries to record those transactions. Before that, companies may also put them on the books of …

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Accrued Expense Journal Entry – Example, Definition, Recording, and Explained

Introduction The term “accrued” means “accumulate” or “increase”. As such accrued liabilities mean that the unpaid bills issued to the company are increasing. When the expenses are made by customers, they don’t make cash payments every time. Despite payments being not made, the company records such expenses as accrued expenses in their books of accounts. …

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Deferred Revenue Journal Entry: Example, Definition, Recording, and Explained

Do customers pay for the goods or services purchased before delivering them? The answer is a big YES. If so, the need for knowing about deferred revenue arises. In common parlance, it is called unearned revenue. The revenue becomes unearned when the company receives advance payment for a product/service which has not been delivered yet. …

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Amortization Expense Journal Entry – Example, Definition, and Recording

Assets are resources owned or controlled by a company or business that bring future economic inflows. There are various types of assets that companies use in daily operations to generate revenues. Among these are fixed assets, which they use in the long run to generate revenues. These assets can be either tangible or intangible. What …

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What is Journaling Entry Testing? Why Is It Important?

Journaling entry testing: The need for journal entry testing arises when the auditor needs to test the nature, timing, and extent of journal entries. It is done to recognize the risk of material misstatement due to fraud while recording financial transactions. The auditor should be vigilant in its audit of transactions and look at all …

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What Are Recurring Journal Entries? Example, Definition and Explained

Concept of Recurring Journal Entry: To understand what a recurring journal entry is, it is necessary to discern the theory of journal entries. Journal entries are the initial influx of business transactions in their books. A journal entry has a dual-sided effect that amends figures in two distinct accounting heads in business books. It is …

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Non-Recurring Journal Entries – Example, Journal Entries, and Explained

Overview: The primary contrast between recurring and nonrecurring transactions accounting can best be comprehended as the distinction between normal, fixed costs an organization hopes to have on a progressing premise versus costs that happen one-time or phenomenally. The detailed discussion regarding non-recurring transactions, along with relevant examples, are explained below: Non-Recurring Transactions The non-recurring costs …

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Accounting for Credit And Cash Purchase Transactions (Explained With Journal Entries)

Overview: Entity purchases goods or renders services to run its business every day, and some of those purchasing transactions are on credit while others maybe pay by cash immediately—most of the purchases including raw materials, offices supplies as well as fixed assets. All of these purchasing needs to records in the entity’s accounting system so …

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