We are going to talk explain how to create a journal entry in QuickBooks. Now, this does require you to have basic knowledge of debits and credits if you are not familiar. We would recommend that you let your bookkeeper or accountant handle the journal entries. But We wanted to show you how it works in QuickBooks in how the debits and the credits work. So, first of all, what is a journal entry? Well, simply a journal entry is an accounting entry with a debit and a credit.
And what can you use the journal entry for? There are three scenarios: the first one is to transfer money between income and expense the other is to transfer money from an asset-liability or equity account into an income and expense. And you can also use journal entries as a traditional accounting system where you use debits and credits. We won’t show you these three scenarios in QuickBooks Online and the QuickBooks desktop now if you would like a quick refresher of debits and credits. We have a skillshare class that We will link below-called an introduction to QuickBooks bookkeeping basics, where it will go through debits and recognition in the accounting equation. And how it works in the backend in QuickBooks, you will get two months free if you click on the link below.
We will select my checking account and debit that, and we will put a description like provided services, and then I’m going to go to my income accounts. And I’m going to put designed income, and it’s going to be a credit, and that’s going to be recorded on my profit and loss for my income And as my asset checking account so I’m going to save and new now let’s say that let’s do a journal entry for a fixed asset. Let’s say we want to record appreciation for the truck that we have. We want to record a cumulative depreciation, so I’m going to click on the asset account, which is depreciation, or it should be titled acumen accumulative depreciation. And that’s going to be a credit, and let’s say I’m going to do $100 to record a cumulative I’m just like you did an appreciation for a truck for December. And then, we’re going to select the expense account, which is depreciation, and it should be under another expense, and that’s a debit, and QuickBooks will bring down the same description as the previous one. And that’s how you record from a fixed asset to an expense account now; if we go into the QuickBooks desktop version, we go to the company then make a journal entry. And we’re going to record a purchase of office supplies from the checking account, so we’re going to go business account we’re going to credit $100 purchased office supplies. And then we’re going to do office oops office supplies $100, and that’s how you record a journal entry usually; we do debits first and credits, but as you can see, your total debt should equal your full credit, and that’s why we wanted to show you today.