The general ledger is the primary accounting tool companies use to record business transactions. Journal entries represent business activities; accountants must record entries to enter the financial information into the general ledger. Recording journal entries is the first step in the accounting cycle. Each month, accountants record transactions through a series of journal entries. The trial balance includes all general ledger account with ending balances. The report allows accountants to ensure all asset accounts equal liabilities and equity accounts.

Step 1.

Identify the type of transaction and which general ledger accounts it affects. Common journal entries relate to revenue, costs of goods sold, inventory accounts payable or receivable and expenses.

Step 2.

Review the information that documents the transaction. Retrieve the dollar amounts associated with the transaction.

Step 3.

Prepare a journal entry. Each entry requires a debit and credit, such as balance changes in two separate general ledger accounts. Dollar amounts should equal those in the associated paperwork.

Step 4.

List the account number, account name and dollar amount for each debit and credit on separate line in the entry.

Step 5.

Post the entry into the general ledger. Enter the dollar amounts into each account, along with a brief yet informative description of the transaction.


List debits first and credits second when writing journal entries.

Journal entries for large dollar amounts or other significant entries may require authorization from an accounting supervisor.