What are journal entries?

• Principles Used
• Access Journal Entries
  • Add a Journal Entry
  • Edit a Journal Entry
• Journal Entries for Specific Account Types

Principles Used

1. All transactions entered in your FreshBooks account will have a corresponding journal entry that affects at least two accounts in your Chart of Accounts - review How are common transactions recorded as journal entries?
2. Whenever an amount is updated, the original entry will be updated on the General Ledger report to reflect the change.

Access Journal Entries

1. Select the Accounting section
2. Then select the Journal Entries sub-section.
   
   

From the Journal Entries section, select either:

• View Report - Review the Journal Entry report to generate a report of manually created journal entries in a specific date range or currency
• Create Journal Entry - Create a new journal entry

Add a Journal Entry

1. If the journal entry needs to go into a new account, the account must be created first with the steps in What is the Chart of Accounts? here
2. Select the Accounting section
3. Then select the Journal Entries sub-section
4. Next, select the Create Journal Entry button
5. Enter the Date and Name of the new journal entry
   
   
6. Next, enter the alphanumeric Number of the journal entry, up to 10 characters including periods and dashes
7. Then choose a Currency
8. Add a Description of the entry for referencing in your reports
9. Choose the Accounts and enter in the amount in either the Debit or Credit fields - at least one account should be debited and one account should be credited
10. If needed, select Add a Line to add more accounts
11. Select Save to finish and the journal entry will be recorded.

Edit a Journal Entry

1. As an accountant, or with Advanced Accounting activated, select the Accounting section
2. Then select the Journal Entries sub-section
3. Select the journal entry you want to edit from the list
4. Then select the Edit Entry button
5. Edit any information as needed and select the Save button.

Journal Entries for Specific Account Types

• Asset
  • Current Assets - Used in daily operations of your business and can be converted into cash easily
  • Long-Term Assets - Typically last longer than a year compared to current assets, are usually depreciated
  • Depreciation - Accounting process that ensures the cost of a long-term asset is allocated correctly over its useful life, due to different methods of calculating this, depreciation must be recorded manually
    
    
• Liability
  • Loans - Amount that is borrowed and is meant to be paid back to the lender, including principal repayments and interest costs
  • Lines of Credit - Preset amount that is borrowed as needed, repaid and borrowed again on a revolving basis, including principal repayments and interest costs
    
    
• Equity - An owner’s investment into their business as well as any withdrawals from the business. This includes withdrawing funds for personal use or depositing funds from a personal account to a business account to help with cash flow
  • If you're using Bank Reconciliation, mark the transaction as owner's equity with the steps in How do I reconcile simple transactions? here
  • If you're not using Bank Reconciliation, record owner's equity as a journal entry with the above steps