Journal Entry

Posted in Finance, Accounting and Economics Terms, Total Reads: 905
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Definition: Journal Entry

A journal entry is an accounting record of a business financial transaction that takes place in an organization. The journal entry states the transaction date and the different accounts that are affected due to the transaction with the amounts.

All the entries together are called as the journal. The daily journal entries can be compiled to form the ledger that can be further used to prepare the financial statements of the organization.

For example, if a transaction occurs in which raw material worth INR 1000 of cash was bought by the organization on 10th January 2012, the journal entry would be recorded as follows,

Date – 10th Jan 2012

Raw material account debit - INR 1000

Cash account credit – INR 1000

 

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